Volkswagen: sales down 8% in 2021 but profit up 451%

German brand prioritised higher equipped cars to ensure financial success last year

Volkswagen sold 4.9 million vehicles in 2021, 8% fewer vehicles than 2020 but still increased operating profit by a significant 451% to 2.5 billion Euros. Sales revenue rose by 7% to 76.1 billion Euros and the firm achieved a return on sales of 3.3%, an increase over the 0.6% of 2020.

While the reduced sales volume is a result of the global semi-conductor shortage, the German car brand’s positive financial results were achieved by selling “higher equipped cars… and allocating semi-conductors in such a way to increase margins,” according to Alexander Seitz, Volkswagen finance boss.

Its businesses in North America and South America also made a profit for the first time in a number of years.

Seitz flagged reduced marketing spend and restrictive hiring programmes - which means Volkswagen's headcount has stayed the same -  as two more cost reduction measures.

The firm would not share sales volume projections for 2022, citing the turbulence of the market from both the semi-conductor crisis and other supply issues created by the invasion of Ukraine.

However, Seitz said he expects the semi-conductor shortage to significantly ease in the second half of the year. He added that its goal to return 6% on sales in 2023 is still on course.

*Volkswagen EV sales increase by 73%*

The firm sold 369,000 electrified vehicles last year, a rise of 73% on the year before. 106,000 were PHEV and 263,000 were fully electric, meaning zero-emission model sales doubled versus 2021.

These sales were predominantly of the Volkswagen ID 3 and Volkswagen ID 4, but also the Volkswagen ID 5 and, in China, the ID 6.

Talking about his highlights of 2021, Volkswagen CEO Ralf Brandstatter said: “This past year was a challenging one for VW and this isn’t going to change in 2022.

“A special moment was when we hit this button to activate the first over-the-air update for our ID Models which worked really well. It was a special moment for the team and it certainly was a highlight. That decision was pivotal. We’re going to build a new production facility with new engineering concepts.”