Volkswagen Commercial Vehicles (VWCV) achieved record sales revenue, profit and returns in the 2017 financial year. The brand is keeping on track for continued success in the current year. In addition, Volkswagen Commercial Vehicles is vigorously pursuing its strategic role in the future fields of electric mobility, digitalisation and mobile online services, developing new customer offerings and opening up new markets.
Last year VWCV delivered around 498,000 urban delivery vans, vans and pick-ups to customers all over the world (2016: 478,000; +4.2 per cent). Sales revenue rose to around €11.9 billion (2016: €11.1 billion; +7.1 per cent). The operating result was €853 million (2016: €455 million; +87.6 per cent). The operating return rose to 7.2 per cent (2016: 4.1 per cent).
Dr Eckhard Scholz, Chairman of the Board of Management of Volkswagen Commercial Vehicles: “This is the highest profit in our company’s history. This top result is due to our completely renewed product portfolio and our systematic implementation of competitive cost structures.” Profits and record deliveries not only continued seamlessly on from the successful year 2016 but are also pointing the way for the strategic reorientation of the brand, Scholz explains.
The growth in results was driven by margin, volume and exchange rate factors. “The extensive measures to protect our results, the updating of the model range, investments in new production equipment and the new Crafter site are paying off”, Scholz underlines. ”
The head of the brand emphasises that maximum customer focus is the key to success. “We offer our customers real added value for their work, their business model and their everyday working life. Their agenda is also our agenda.” As examples, Scholz cites the development of new models together with customers and a customer advisory board that is trend-setting for the industry
Currently, customers from the trades and parcel services are testing the e-Crafter, which is now ready to go into production, to its final real-world tests, before its sales launch in September 2018.
Deliveries to customers
Volkswagen Commercial Vehicles delivered 497,894 light commercial vehicles of the Amarok, Caddy 4, Crafter and T6 product lines worldwide in 2017, which is 4.2 per cent or 19,920 more vehicles to customers than in the same period last year (477,974). Scholz explains that the brand once again increased its worldwide deliveries in 2017. An increase of almost 20,000 vehicles is a respectable result and brings the brand a new all-time sales record.
Broken down by product line:
• 206,100 T-series vehicles (198,600; +3.8 per cent)
• 165,900 vehicles of the Caddy product line (162,400; +2.2 per cent)
• 78,900 vehicles of the Amarok product line (69,200; +14.0 per cent)
• 47,000 vehicles of the Crafter product line (47,900; -1.8 per cent)
The delivery figures of the brand and models, T6 and Caddy 4, have once again improved on the already high level of the previous year, Scholz emphasises. The Amarok has also increased its worldwide sales thanks to its new V6 engine. The new Crafter has not yet fully developed its full potential due to its start-up status but is almost on a par with its predecessor. However, there is still a lot of “room for improvement”, as the new Crafter is not yet on sale in all versions and across all European markets.
The result was only clouded by the suspension of delivery for the T6 passenger vans at the beginning of December 2017. Since the beginning of March, the sales department has resumed the delivery process of the T6 at full speed. Scholz formally apologised to customers and added: “We had no alternative but to stop deliveries and I thank our customers for their brand loyalty, patience and enthusiasm for the T6.”
In Europe the brand sold 373,160 vehicles (2016: 363,656; +2.6 per cent). The T6 series and the Caddy as city delivery vans each achieved about one-fifth of the market share in their market segments. In order to develop markets beyond the traditional European markets, the brand is embracing consistent internationalisation through CKD production in various countries. In 2017, the Caddy started production in Algeria at a Group CKD multi-brand factory and the Amarok CKD production in Ecuador.
Currently, negotiations with the Chinese partner JAC to form an MPV joint venture are in progress. From today’s point of view, more cooperation is the way forward. Scholz adds: “There are many things you achieve better with a partner.”
Production at the sites
In 2017, the productions at the sites in Germany and Poland have reached a volume of 494,511 vehicles, an increase of 16 per cent – a new record. The home plant in Hannover produced 200,800 T6 and Amarok, that number of vehicles was lastly achieved 44 years ago.
“I would like to thank my colleagues at the assembly lines, who have worked many extra shifts to get every vehicle to the customer on time”, Scholz says.
High demand for all product lines has a positive effect on the employment at the sites. At the Hannover plant, a total of 768 temporary workers were transferred to the permanent workforce between July 2017 and March 2018.
“Electric mobility, digitalisation, mobile online services offer us the opportunity to combine our experience, our tradition and the challenges of the future, generating efficient, promising and cost-reducing business models for our customers”, emphasises Scholz.
Solutions for the change are for example, through the market entry of the e-Crafter or through the design of the “Urban Logistics” project initiative, in which VWCV, together with Hannover, the state capital of Lower Saxony, and university research institutions are carrying out empirical studies on the change in urban services and goods traffic. Obviously, it is important to consistently electrify inner-city services and goods traffic in order to achieve more sustainable inner city logistics.
“Together with our customers, we are going to further the electrification of certain types of commercial vehicles for the cities. Not every use of purpose can be performed with electric drive. Overland ride with a high operational performance, trailer operations with heavy loads, rough terrain like construction sites, forest- or emergency services still require diesel engines”, Scholz says.
But the market penetration of alternative drive systems is still as far removed as ever, due to the further delay to the political and regulatory framenwork, Scholz explains. Electric vehicles must be climate-neutral. “If the almost one million craftsperson companies in Germany alone electrify their fleets of vehicles, will the electricity required for this come exclusively from green sources? At this point the German energy revolution is still facing huge challenges”, Scholz underlines.
The aim of the brand is to offer its customers the best transport solutions in the world. All future new generations of vehicles will be offered in electrically powered versions. “There are plenty of challenges, but with the right commercial vehicle orientation, a gradual further internationalisation, continued profitability and the development of the right technologies for the future, these can be successfully mastered”, emphasises Scholz.