Sylvain Robin/Dreamstime
Volkswagen New Dealership Sign Logo Store Of German Automaker Shop © Sylvain Robin Dreamstime

Volkswagen Sees Impact of Ukraine War Despite Profit Bounce

April 14, 2022
The lack of critical car parts has already forced Volkswagen, along with other German carmakers, to curtail production at some plants, while exports to Russia have been halted.

German auto giant Volkswagen said Thursday its first quarter operating profit increased significantly in 2022, while warning that the "first effects" of the war in Ukraine were beginning to be felt. 

The group's operating profit, a measure of profitability closely watched by investors, rose to 8.5 billion euros ($9.3 billion) over the first three months of the year from 4.8 billion euros in the same period last year, according to preliminary figures.

The boost was down to strong "operating performance" and a positive effect of 3.5 billion euros thanks to hedges against the changing price of raw materials.

The turbulence on commodities markets could be traced back to the "ongoing war in Ukraine", which has pushed up prices, Volkswagen said in a statement.

Supply chain impacts could also be seen, with deliveries from suppliers in Ukraine being limited.

The lack of critical car parts has already forced Volkswagen, along with other German carmakers, to curtail production at some plants, while exports to Russia have been halted.

The course of the war and the impact on Volkswagen "cannot be predicted with sufficient certainty" but risked having a "negative impact" on the Wolfsburg-based group.

Volkswagen also said it delivered some 500,000 fewer cars in the first quarter of 2022 than in the previous year, a 22% drop. 

The continued impact of the coronavirus pandemic, which has recently led to widespread lockdowns in China, a key market, also loomed over the auto manufacturer's future performance.

As did the possibility of further disruption to supply chains "especially for semiconductors," a key component in both conventional and electric vehicles.

The two effects already conspired to make business difficult for Volkswagen in 2021. Despite net profits rising by 75% to 15.4 billion euros, the 12-brand group delivered 600,000 fewer units last year, as lockdowns and shortages caused interruptions in production.

Copyright 2022, Agence France-Presse

Popular Sponsored Recommendations

Lean Manufacturing in the Age of the Industrial Internet

Oct. 24, 2023
Read how advanced MES capabilities can help you improve your labor utilization, reduce WIP, and optimize your production. Download the white paper today.

The Next-Gen Strategy for Delivering on Your Supply Chain Commitments

March 26, 2024
Manufacturers are struggling to provide the necessary customer experience to their external ecosystem. Read this whitepaper to learn about supply chain convergence – and why it...

Preventive Maintenance: Improve Productivity on Production Floors

June 28, 2023
Everything needs to run smoothly in manufacturing. For processes to run smoothly, they need continuous improvement in every part of the chain. One area is operator maintenance...

SEC Cybersecurity Rules: What’s Your Regulatory Risk?

Feb. 27, 2024
Join us for an insightful exploration of the evolving cyber threat landscape, SEC rule implications, and collaborative strategies to secure critical IT and OT networks in the ...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!