(Bloomberg)–Volkswagen AG expects to sidestep a slowing economy this year with sales up as Europe’s largest automaker benefits from full order books and better access to semiconductors.
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VW expects sales to increase by as much as 15% due to a similar increase in vehicle deliveries. The company expects an operating return of no less than 8.5%, about the same as last year’s result, but better than analysts had expected. Shares rose the most since last March.
“We expect supply chain bottlenecks to gradually ease in the current year, enabling us to clear the large order backlog,” chief financial officer Arno Antlitz said in a statement Friday.
Mercedes-Benz AG, Renault SA and Stellantis NV reported healthy profits in recent weeks on high prices and orders they piled up during the height of the supply chain crisis. The strong results stem from concerns about declining demand later this year as record inflation and slowing economies put increasing pressure on car buyers.
VW shares rose as much as 10.2%, the strongest intraday gain since March 9, 2022. They are up about a fifth this year.
VW is working on a number of hurdles in its shift to electric cars, which accounted for 7% of group deliveries last year. Chief Executive Officer Oliver Blume, who has been ranked number one since September, is under pressure to revamp the company’s software and defend VW’s position in its largest market China against homegrown manufacturers.
Read more: VW sees €3.6bn cash gap as logistical issues create glut
The German company proposed a dividend of €8.70 per common share and €8.76 per preferred share, an increase of €1.20 per share from last year’s payout.
While returns are currently strong, automakers continue to battle supply chain issues. Thousands of unsold vehicles and unused raw materials are piling up in factories across Europe due to a shortage of trucks and trains. The problems, due to chip shortages finally abating, have prompted Stellantis and Renault to recruit truck drivers among their factory workers.
–With help from Monica Raymunt and Craig Trudell.
(Updates with EV push information in sixth paragraph.)
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