Volkswagen profits $23,000 on every new Porsche

18 March 2014

Germany's Volkswagen AG, which is aiming to be the world's top carmaker, makes a neat profit of $23,000 on every Porsche sold, a feat that is far impressive than the volume of passenger cars sold by its arch rival Toyota.

For every Porsche it sold last year, the Wolfsburg-based carmaker booked an operating profit of $23,200 or a margin of 18 per cent, according to the company's annual report released late last week.

Volkswagen, which also owns luxury cars under the Audi, Lamborghini and Bentley brands, made a $5,200 operating profit on each of these brands sold, or a 10 per cent margin.

The operating profit on Volkswagen's luxury brands pales the return of a mere $850 return, or 2.9 per cent margin, for one of its mass-market passenger cars like the Jetta or the Passat.

Porsche achieved record figures in sales, revenue and profit in 2013. It sold 162,145 vehicles - 15 per cent higher than the previous year, while revenue rose by 3 per cent to €14.3 billion and operating profit rose by 6 per cent to €2.58 billion.

At Porsche's annual press conference in Stuttgart on Friday, CEO Matthias Müller said the sports car manufacturer ''had not only continued to grow profitably, but had also done full justice to its role as technological leader by developing new technologies and launching new models.''

In the fiscal year 2013, Porsche became the first company to present a plug-in-hybrid vehicle in the luxury class, the Panamera S E-Hybrid, as well as the first super sports car with high performance plug-in hybrid drive, the 918 Spyder.

In addition, Porsche unveiled the first sports car in the compact SUV segment, the Macan. ''With these vehicles, we have laid the foundation for continued future success,'' Müller stressed and added, ''they were also a factor in making 2013 the most successful year in the company's history to date.''

While Porsche did extremely well last year, Audi (combined with Lamborghini) and Bentley were not far behind. Audi generated sales of €49.9 billion, and operating profit of €5 billion, while Bentley generated revenue of €1.7 billion between January and December 2013, and operating profit rose by 66.9 per cent to €168 million.

With the global economy on the upswing, Volkswagen's luxury brands did well since its customers are from the affluent class and are less price sensitive, according to analysts.

But Volkswagen's passenger car brands did not do as well as the luxury brands as sales revenue were €103.9 billion, falling short of the prior-year figure by 4.4 per cent, and operating profit of  €3.6 billion. (Sales revenue, operating profit and unit sales does not include Volkswagen's Chinese joint ventures)

Volkswagen said its operating profit was affected by lower unit sales and upfront expenditures for new technologies in particular. The carmaker spent over €10 billion on research and development last year – more than any other car manufacturer in the world.

Volkswagen's total sales for 2013 were up only 2.2 per cent, to €197 billion, while net income slid 58 per cent, to €9.1 billion.

 The company, which aims to top Toyota as the world's best-selling carmaker in the future, sold over 3 million units for the first time last year, still way behind its Japanese rival's 9.98 million units and General Motors 9.71 million vehicles.