Volkswagen Commercial Vehicles Achieves Record 2014

  • Record performance for sales revenue and operating profit
  • Profit rises due to model mix and cost optimisation
  • Growth in Western Europe, economic decline in Brazil
  • New generations of Caddy 4 and T6 to be launched

Hanover, 18 March 2015 – Annual Press Conference: Last year, Volkswagen Commercial Vehicles delivered 445,000 urban delivery vans, Transporters and pick-ups to customers all over the world (2013: 436,000; +2 per cent). Sales revenue rose to 9.6 billion euros (2013: 9.2 billion euros; +2.2 per cent). The operating result was 504 million euros (2013: 448 million euros; +12.5 per cent).

Dr Eckhard Scholz, Chairman of the Board of Management for Volkswagen Commercial Vehicles, said: ‘If you consider the fact that our models did not reach their usual sales performance in our second largest sales market of South America because of the economic crisis there in 2014, the result is excellent.

‘In Western Europe all models, especially the T5 and the Crafter, experienced strong demand’, said Scholz. ‘This boosted the good results, also because of the positive effect of the product mix.’

Additional profit growth was achieved through the implementation of cost-optimisation schemes in all areas of the company. ‘From Development, Purchasing and Production through to Sales, in offices and on assembly lines, all Volkswagen Commercial Vehicles employees persistently and systematically identified potential for improvements which altogether contributed to increasing results,’ continued Scholz.

Deliveries by model

In 2014, worldwide deliveries for Volkswagen Commercial Vehicles rose by 2.0 per cent to 445,000 light commercial vehicles of Amarok, Caddy, Crafter and T5 models (2013: 436,000); adjusted for deliveries of T2, production of which ceased at the end of 2013 in Brazil.

The T5 and the Crafter were the models with the largest gains. The Caddy topped the sales figure for the previous year while the Amarok suffered losses, said Scholz in his report.

Globally the number of Amarok pick-ups sold declined by 12.2 per cent to 78,100 units (2013: 89,000). ‘In 2014, we delivered about 20 per cent fewer Amarok vehicles in its main market of South America. Amarok sales even decreased by one third in Brazil due to market conditions.’

Caddy deliveries worldwide rose by 1.6 per cent to 148,900 vehicles (2013: 146,600). ‘We experienced encouraging increases in demand for the Caddy, especially from the Netherlands but also from Italy and Spain, the traditional markets for light urban delivery vans,’ said Scholz.

Globally, sales of the T5 model series rose by 7.9 per cent to 168,600 deliveries (2013: 156,300). ‘In Western Europe we sold ten per cent more T5 vehicles. Besides Germany the boom markets for the Transporter were mainly France and the UK,’ reported Scholz.

Deliveries of the Crafter rose by 11.6 per cent to 49,200 vehicles (2013: 44,100). ‘The increase in figures for the Crafter in a highly contested vehicle segment confirms that we are on the right track with our plans to double production of the Crafter’s successor in a new dedicated factory,’ stressed Scholz.

Deliveries by region

The markets in Western Europe recorded significant growth in 2014. Here the brand delivered 292,000 vehicles from all model series, representing an increase of 6.5 per cent over 2013. Germany alone reported 120,000 deliveries, a growth of 4.6 per cent.

This is also confirmed by the new vehicle registration statistics. ‘We are proud that almost every fifth new registration of an urban delivery van, Transporter or pick-up in the European Economic Area stems from our production. In Germany this figure is every third,’ explained Scholz.

Growth was also achieved in the Asia-Pacific region where deliveries rose by 12.7 per cent to 22,700 units. In Eastern Europe the economically-challenging market led to a decline in deliveries by 6.1 per cent to 37,700 vehicles. In Russia sales dropped by 20.8 per cent to 12,600 units.

In South America, sales of the current Volkswagen Commercial Vehicles model range declined by 21.7 per cent to 39,300 deliveries (2013: 50,200). In Brazil the difficult situation led to a drop of 30.8 per cent to 16,900 units. Sales in Argentina managed to stay similar to the previous year’s performance, with only a slight dip of 1.3 per cent to 16,500 deliveries.

Operating profit 2014

In 2014, sales revenue for Volkswagen Commercial Vehicles rose by 2.2 per cent to 9.577 billion euros (2013: 9.370 billion). The operating result was 504 million euros (2013: 448 million euros). ‘This is quite remarkable and the brand is well on track. Despite unfavourable economic conditions, Volkswagen Commercial Vehicles achieved its best operating result ever’, stressed Scholz.

‘The 2014 results, which also include a high return on investment (ROI), provide us with an adequate financial basis to invest in the coming years’, said Scholz. The brand’s ROI was 16.5 per cent and was significantly above the minimum yield target of nine per cent. ‘Now we need to continue earning the money to grow in the coming years.’

After the new vehicle generations, Caddy 4 and T6, the brand now needs to finance the expansion of its existing factories to secure the future, as well as the new factory for the Crafter’s successor in Września in Poland. ‘We will continue our cost-optimisation programmes in the coming years. Through this we will achieve solid results’, Scholz stressed.

Production in 2014

In 2014, a total of 446,100 vehicles were produced, 2.8 per cent more than in 2013. For economic reasons, figures for the Amarok declined to 69,700. With a total of 148,100 units, production of the Caddy remained at the full capacity level of 2013. The T5 was the vehicle with the highest sales and a growth of 18.9 per cent at 178,400 units. The Crafter is produced at the plant of a co-operation partner and production rose by 13.4 per cent to 49,900 units.

Production at the plants in Poznań and Hanover ran at full capacity in 2014 to meet the rising number of customer orders from the markets.

The Poznań site produced 175,500 Caddy and T5 vehicles, 2.7 per cent more than in 2013. Capacity utilisation was far above its limits – the assembly lines worked 21 weekends last year. At the same time, the switch over from Caddy 3 to Caddy 4 went very smoothly at the Poznań plant.

In Hanover, production facilities are now switching from the T5 to the T6 with no less success. The brand’s traditional plant in Hanover increased its production by 10.6 per cent to 168,942 units of the T5 and Amarok. Due to heavy demand for the T5, employees worked more than 36 extra shifts (2013: eight extra shifts) last year. Further unscheduled production took place on 28 weekends.

‘Our workforces in Poznań and Hanover were trained for the start of production of the Caddy 4 and the T6. Aside from the necessary qualification for this, they convincingly mastered the constantly increasing number of orders for the present vehicle generation and raised production capacity limits by working extra shifts. Our employees did a really good job!’, said Scholz.  Pre-sale of the new T6 will start in week 17, said Scholz, and static presentation for the press will be on April 15th 2015 in Amsterdam.

On the whole, Volkswagen Commercial Vehicles achieved top performance in 2014, said Scholz in conclusion. ‘Despite managing the multiple burdens of launch preparation and a sales boom we succeeded in defending our market position and every vehicle was delivered to the customer on time and with the usual Volkswagen quality.’

Long history of success and anniversaries

Over the past 65 years, nothing has changed in the commitment and enthusiasm for building the Transporter, stressed Scholz. In March 1950, production started on the T1 in Wolfsburg with ten microbuses a day. Today, the daily production in Hanover alone is on average 730 Transporter vehicles.

Two weeks ago, it was the 60th anniversary of the ground breaking ceremony for the Transporter plant in Hanover. It took only one year, from March 1955 to March 1956, until the first Transporter rolled off the assembly line in Hanover Stöcken – now overall production is approaching the nine and a half million mark. The site has begun to make preparations for the 60th production anniversary which will take place next year.

The long history of success is an obligation, but also an incentive, underlined the Chairman. ‘The market demands extremely reliable, variable and individualised vehicles. This is true for the past as well as today. We supply our models in top quality to meet every requirement exactly – whether it is for the craft trades, retail trade, service providers, family or recreation.’

In the commercial vehicle business, quality and on-time delivery are key values which matter to customers who earn their living with a Volkswagen light commercial vehicles, just as much as reliability, safety and value for money. This will not change in future, even with the new vehicle generation which the brand will launch to market in 2015. ‘Both the Caddy 4 and the T6 will set new standards in their segments when it comes to cost-effectiveness, eco-efficiency and fuel economy and this will make them even more attractive to our customers,’ explained Scholz.

Outlook

In 2015, the brand will continue to renew itself in order to increase its international competitiveness. Volkswagen Commercial Vehicles has taken a decisive step forward with the new generations of the Caddy and the Transporter.

The completed construction phases of the new plant for the Crafter successor in Września, Poland, are on schedule. Września is the right choice for the Crafter plant, especially since general conditions in the west of Poland are excellent; it is in close proximity to the Poznań site, which has years of experience in building the Caddy and the Transporter. The new model, which will leave the assembly line at the new plant in autumn 2016, is more than satisfactory in all its development phases. ‘I look forward to the start of production in Września and to the world première of the new Crafter at the International Motor Show for Commercial Vehicles in Hanover in 2016,’ said Scholz.

The focus is also on continuing expansion of the existing plants in Poznań and Hanover: ‘We need to expand production capacity for the new generations and therefore we have already installed new machinery which will start production this year and next,’ explained Scholz. As examples at the main assembly plant in Hanover, Scholz quoted the PXL press which will start up in autumn and the New Future-Oriented Assembly system (Neue Zukunftsfähige Montage, NZM) which will bring automotive production to the latest state of ergonomic design and production technology by the middle of 2016.

The agreement on the future development of the site, which concluded in 2014, will not only secure jobs, it will also help keep the plant competitive on an international scale. This means the company intends to vigorously expand business with Crafter chassis frames and further aims for additional customer groups.

Overall, Volkswagen Commercial Vehicles will fulfil its strategic role as developer, manufacturer and seller of light commercial vehicles within the Group’s commercial vehicle segment. ‘There are plenty of challenges, but Volkswagen Commercial Vehicles will take action from a position of strength with new models, efficient plants and highly motivated employees, securing a competitive edge on international markets,’ stressed Scholz.