Hanover, 2008-03-26
Volkswagen Commercial Vehicles achieves all-time high in deliveries, turnover and operating profit in 2007
• Deliveries worldwide increase by 10.7 percent
• Turnover growth of 15 percent
• Operative profits soar by 121 percent
• Cash flow and net liquidity over 70 percent higher
• Return on capital reaches eight percent
• Continuation of profitable growth expected in 2008
In 2007, the brand Volkswagen Commercial Vehicles once again strongly increased both its deliveries worldwide and its leading market position. The significant financial indicators reached new record values. Stephan Schaller, spokesman for the board of Volkswagen Commercial Vehicles, says: “Volkswagen Commercial Vehicles not only achieved its targets for 2007, but exceeded them. This is the fourth year running that we have broken our sales record and the third successive year that we have stayed steadily in the black.” In the coming ten years up to 2018, the brand is planning to increase deliveries to 800,000 vehicles worldwide, Schaller adds.
Deliveries in 2007
Worldwide deliveries by Volkswagen Commercial Vehicles to customers in 2007 rose by 10.7 percent to 488,700 unit sales (2006: 441,500). In 2007, all models contributed to growth:
• Deliveries of the Caddy went up by 7.7 percent to 147,200 vehicles in 2007 (previous year: 136,700)
• T5 Series deliveries increased by 5.2 percent to 191,000 vehicles (previous year: 182,000)
• Crafter deliveries gained 10.4 percent, amounting to 46,200 vehicles (previous year: 41,800)
• Trucks & buses experienced a rise of 25.8 percent to 46,500 unit sales (previous year: 37,000)
• Saveiro / T2 deliveries soared by 29.2 percent to 57,100 vehicles (previous year: 44,200).
With a market share of 14.6 percent and 311,600 first-time registrations of light commercial vehicles in the European Economic Area, Volkswagen Commercial Vehicles ranked top of the registration statistics for the first time in 2007 – an improvement of 5.9 percent, or 17,250 more first-time registered vehicles than in the previous year.
Another record level was achieved in deliveries of the series produced by the South American subsidiary Caminhões e Ônibus, with more than 46,000 trucks and buses sold worldwide, representing growth of about 26 percent compared with 2006. In Brazil, trucks in the category total weight five tonnes and over kept their market lead for the fifth time in succession.
In the main Western European markets further improvements were realised, bringing Volkswagen Commercial Vehicles the leading market position in Germany, Sweden, Austria and the Netherlands, with a market share of c. 30 percent. In 2007, important new impulses for vehicle deliveries came from Eastern Europe, with an increase of approximately 32 percent.
Harald Schomburg, Volkswagen Commercial Vehicles board member with responsibility for sales and marketing, commented: “by virtually doubling deliveries within only five years, we have successfully continued the ongoing positive development of Volkswagen Commercial Vehicles throughout the world.“
Development of operating profit 2007
Resulting from the record deliveries, there was a significant jump in turnover: the brand’s sales volume went up by 15 percent to 9.3 thousand million Euro (previous year’s figure: 8.1 thousand million Euro).
Following the consolidation of results in 2005, operating profit more than doubled, gong from 137.6 million Euro in 2006 to 305 million Euro in 2007 (a rise of 121 percent). Particularly relevant for this development were the market successes of the two new series, Crafter and Constellation, which achieved excellent sales figures in 2007 following their introduction in 2006.
“As well as the rising delivery figures, the positive results have been driven by further improvements in productivity, permanent savings in material costs and the sustained optimisation of fixed costs“, said Frank Fiedler, Volkswagen Commercial Vehicles board member with responsibility for finance and integration technology. Based on these factors, the brand also expects continuous improvement of all financial indicators through the coming years.
The greatly improved operating profit led to another substantial increase in net cash inflow from operating activities. In 2007 the net cash flow of Volkswagen Commercial Vehicles went up by 73 percent to 706 million Euro (previous year: 409 million Euro). Correspondingly, net liquidity also improved substantially in 2007, increasing by 76 percent to 1.6 thousand million Euro (previous year: 915 million Euro).
“This means that we are equipped better than ever with liquid funds for growth in the coming years, for opening up new markets and new generations of vehicles“, said Fiedler. “We shall be able to continue to support these new projects from our internal financial resources“.
In 2007, the balance investments of VCV again went down by eight percent to 143 million Euro (previous year: 156 million Euro). “We have experienced growth on the product and volume side, and have nevertheless reduced our investment ratio“, Fiedler emphasised. Volkswagen Commercial Vehicles’ rate of return had also shown a steep upward trend commensurate with the operating profits. The return on investment in 2007 was eight percent, which meant that VCV had advanced much more rapidly than planned, said Fiedler (previous year’s figure: 3.4 %). The return on sales showed an improvement to 3.3% which, however, was not yet sufficient and would certainly require further efforts.
Production and employees at the factories
As a consequence of the increased global demand in 2007, vehicle production in the factories at Hanover, Poznań (Poland), Resende (Brazil) and other locations manufacturing commercial vehicles also expanded, to 435,000 units (compared with 427,000 in the previous year). This figure does not include the Crafter series, which is built entirely at Mercedes in Düsseldorf and Ludwigsfelde.
Despite the increase in volume and despite preparations for commencement of production in Poznań and Pacheco and the expansion of new business fields, Volkswagen Commercial Vehicles’ workforce increased by only 1.5 percent to approximately 19,700 employees (previous year’s figure: 19,400).
“In all our factories, we have lowered the vehicle manufacturing costs, reduced fixed cost pools, increased production volume, improved productivity and optimised the quality of our products“, said Stephan Schaller, spokesman for the board of Volkswagen Commercial Vehicles, “according to our premise: lower costs and higher turnover”.
He said that particularly the factory in Hanover made substantial progress in 2007 in terms of the key parameters of labour productivity and costs per vehicle, and is more internationally competitive today than ever before.
The reasons for the continuous rise in productivity of the Hanover production plant were to be found in innovative work organisation and efficient structures such as the shortened lead times.
“We are securing jobs by producing more vehicles using optimised processes, and – according to the motto “growth without growing “ – with about the same sized workforce as before; in addition, we are bringing new products to Hanover“, Schaller underlined the situation.
As a successful example of the new scope of work, Schaller cited the manufacture of the painted body shell of the Porsche Panamera, which will be commencing in summer 2009. “This growth in volume is another component of our strategy to secure employment in our traditional location of Hanover“, he explained.
In addition, he said, Volkswagen Commercial Vehicles had initiated an “optimisation process“ of its company culture at the beginning of 2007 with the title “VWN bewegen“ (“Volkswagen Commercial Vehicles on the move“), in order to improve the competitiveness of the brand, enhance performance profile, avoid duplicated tasks and achieve new synergies. Further decisive impulses were provided by the new production system, the “Volkswagen Way“, with its elements of teamwork, agreed objectives and continuous improvement.
Looking ahead
Schaller outlined the strategic programme of Volkswagen Commercial Vehicles up to 2018 as follows: the brand will be making its contribution to the growth strategy of the Volkswagen concern, and plans by that year to increase its deliveries from the present figure of 500,000 unit sales to about 800,000 worldwide. “We are orienting our product range towards the regional customer requirements of the diverse markets.“ It was essential, he said, to adapt both existing and new products so as to provide a range that would be target group-oriented and appropriate both for Western Europe’s saturated automotive markets, for the up-and-coming markets of Eastern Europe and for the dynamic, transport-oriented emerging markets.
Volkswagen Commercial Vehicles will be participating in the product offensive of the Volkswagen concern with the new generation of pickup vehicles known as RPUs (Robust Pick Ups). The RPU will first be introduced in South America and other emerging markets as a particularly robust utility vehicle with a payload of one tonne. Production of the series will first be starting at the end of 2009 at the Argentinian VW factory in Pacheco, and it will be presented at this year’s IAA Commercial Vehicles in the form of a series-oriented study.
“Volkswagen Commercial Vehicles is strategically well positioned and, with the present range of models and the new series, has high growth potential worldwide“, Stephan Schaller summed up. Objectives for 2008 are the judicious further expansion of growth, and the promotion of strategic planning for new market entries.
Deliveries in 2007
Worldwide deliveries by Volkswagen Commercial Vehicles to customers in 2007 rose by 10.7 percent to 488,700 unit sales (2006: 441,500). In 2007, all models contributed to growth:
• Deliveries of the Caddy went up by 7.7 percent to 147,200 vehicles in 2007 (previous year: 136,700)
• T5 Series deliveries increased by 5.2 percent to 191,000 vehicles (previous year: 182,000)
• Crafter deliveries gained 10.4 percent, amounting to 46,200 vehicles (previous year: 41,800)
• Trucks & buses experienced a rise of 25.8 percent to 46,500 unit sales (previous year: 37,000)
• Saveiro / T2 deliveries soared by 29.2 percent to 57,100 vehicles (previous year: 44,200).
With a market share of 14.6 percent and 311,600 first-time registrations of light commercial vehicles in the European Economic Area, Volkswagen Commercial Vehicles ranked top of the registration statistics for the first time in 2007 – an improvement of 5.9 percent, or 17,250 more first-time registered vehicles than in the previous year.
Another record level was achieved in deliveries of the series produced by the South American subsidiary Caminhões e Ônibus, with more than 46,000 trucks and buses sold worldwide, representing growth of about 26 percent compared with 2006. In Brazil, trucks in the category total weight five tonnes and over kept their market lead for the fifth time in succession.
In the main Western European markets further improvements were realised, bringing Volkswagen Commercial Vehicles the leading market position in Germany, Sweden, Austria and the Netherlands, with a market share of c. 30 percent. In 2007, important new impulses for vehicle deliveries came from Eastern Europe, with an increase of approximately 32 percent.
Harald Schomburg, Volkswagen Commercial Vehicles board member with responsibility for sales and marketing, commented: “by virtually doubling deliveries within only five years, we have successfully continued the ongoing positive development of Volkswagen Commercial Vehicles throughout the world.“
Development of operating profit 2007
Resulting from the record deliveries, there was a significant jump in turnover: the brand’s sales volume went up by 15 percent to 9.3 thousand million Euro (previous year’s figure: 8.1 thousand million Euro).
Following the consolidation of results in 2005, operating profit more than doubled, gong from 137.6 million Euro in 2006 to 305 million Euro in 2007 (a rise of 121 percent). Particularly relevant for this development were the market successes of the two new series, Crafter and Constellation, which achieved excellent sales figures in 2007 following their introduction in 2006.
“As well as the rising delivery figures, the positive results have been driven by further improvements in productivity, permanent savings in material costs and the sustained optimisation of fixed costs“, said Frank Fiedler, Volkswagen Commercial Vehicles board member with responsibility for finance and integration technology. Based on these factors, the brand also expects continuous improvement of all financial indicators through the coming years.
The greatly improved operating profit led to another substantial increase in net cash inflow from operating activities. In 2007 the net cash flow of Volkswagen Commercial Vehicles went up by 73 percent to 706 million Euro (previous year: 409 million Euro). Correspondingly, net liquidity also improved substantially in 2007, increasing by 76 percent to 1.6 thousand million Euro (previous year: 915 million Euro).
“This means that we are equipped better than ever with liquid funds for growth in the coming years, for opening up new markets and new generations of vehicles“, said Fiedler. “We shall be able to continue to support these new projects from our internal financial resources“.
In 2007, the balance investments of VCV again went down by eight percent to 143 million Euro (previous year: 156 million Euro). “We have experienced growth on the product and volume side, and have nevertheless reduced our investment ratio“, Fiedler emphasised. Volkswagen Commercial Vehicles’ rate of return had also shown a steep upward trend commensurate with the operating profits. The return on investment in 2007 was eight percent, which meant that VCV had advanced much more rapidly than planned, said Fiedler (previous year’s figure: 3.4 %). The return on sales showed an improvement to 3.3% which, however, was not yet sufficient and would certainly require further efforts.
Production and employees at the factories
As a consequence of the increased global demand in 2007, vehicle production in the factories at Hanover, Poznań (Poland), Resende (Brazil) and other locations manufacturing commercial vehicles also expanded, to 435,000 units (compared with 427,000 in the previous year). This figure does not include the Crafter series, which is built entirely at Mercedes in Düsseldorf and Ludwigsfelde.
Despite the increase in volume and despite preparations for commencement of production in Poznań and Pacheco and the expansion of new business fields, Volkswagen Commercial Vehicles’ workforce increased by only 1.5 percent to approximately 19,700 employees (previous year’s figure: 19,400).
“In all our factories, we have lowered the vehicle manufacturing costs, reduced fixed cost pools, increased production volume, improved productivity and optimised the quality of our products“, said Stephan Schaller, spokesman for the board of Volkswagen Commercial Vehicles, “according to our premise: lower costs and higher turnover”.
He said that particularly the factory in Hanover made substantial progress in 2007 in terms of the key parameters of labour productivity and costs per vehicle, and is more internationally competitive today than ever before.
The reasons for the continuous rise in productivity of the Hanover production plant were to be found in innovative work organisation and efficient structures such as the shortened lead times.
“We are securing jobs by producing more vehicles using optimised processes, and – according to the motto “growth without growing “ – with about the same sized workforce as before; in addition, we are bringing new products to Hanover“, Schaller underlined the situation.
As a successful example of the new scope of work, Schaller cited the manufacture of the painted body shell of the Porsche Panamera, which will be commencing in summer 2009. “This growth in volume is another component of our strategy to secure employment in our traditional location of Hanover“, he explained.
In addition, he said, Volkswagen Commercial Vehicles had initiated an “optimisation process“ of its company culture at the beginning of 2007 with the title “VWN bewegen“ (“Volkswagen Commercial Vehicles on the move“), in order to improve the competitiveness of the brand, enhance performance profile, avoid duplicated tasks and achieve new synergies. Further decisive impulses were provided by the new production system, the “Volkswagen Way“, with its elements of teamwork, agreed objectives and continuous improvement.
Looking ahead
Schaller outlined the strategic programme of Volkswagen Commercial Vehicles up to 2018 as follows: the brand will be making its contribution to the growth strategy of the Volkswagen concern, and plans by that year to increase its deliveries from the present figure of 500,000 unit sales to about 800,000 worldwide. “We are orienting our product range towards the regional customer requirements of the diverse markets.“ It was essential, he said, to adapt both existing and new products so as to provide a range that would be target group-oriented and appropriate both for Western Europe’s saturated automotive markets, for the up-and-coming markets of Eastern Europe and for the dynamic, transport-oriented emerging markets.
Volkswagen Commercial Vehicles will be participating in the product offensive of the Volkswagen concern with the new generation of pickup vehicles known as RPUs (Robust Pick Ups). The RPU will first be introduced in South America and other emerging markets as a particularly robust utility vehicle with a payload of one tonne. Production of the series will first be starting at the end of 2009 at the Argentinian VW factory in Pacheco, and it will be presented at this year’s IAA Commercial Vehicles in the form of a series-oriented study.
“Volkswagen Commercial Vehicles is strategically well positioned and, with the present range of models and the new series, has high growth potential worldwide“, Stephan Schaller summed up. Objectives for 2008 are the judicious further expansion of growth, and the promotion of strategic planning for new market entries.