Volkswagen AG reported its sales and operating earnings were in line with forecasts but noted its cash flow fell short of expectations as supply chain snags led to higher unsold inventory at year’s end.
Like other automakers, Volkswagen has struggled with continued supply chain disruptions because of the War in Ukraine and COVID-Zero policies in China. These snags limited production as automaker’s waited for parts.
Volkswagen reported in a regulatory statement that the continuing disruptions to supply chains left the company with excess inventories of finished goods, raw materials and supplies at year’s end.
Preliminary earnings estimates put revenue at 279 billion euros, equivalent to about $299 billion, up approximately 12% from a year ago. Operating profit before special items hit 22.5 billion euros, which Volkswagen reports is a return on sales of 8.1%, well within the range previously targeted by the company.
The automaker put net cash flow at 5 billion euros in 2022, falling short of the company’s self-imposed target of matching the 8.6 billion euros in cash flow achieved in the previous year.
“The deviation is mainly because of the unstable supply situation throughout 2022 and disruptions in the logistics chains, particularly at the end of the year,” Volkswagen reported in a statement. The automaker noted that it expects the headwinds affecting cash flow to ease in the year ahead.
Volkswagen reported the net liquidity of its automotive division was around 43 billion euros at the end of 2022. This figure included about 16 billion euros in cash generated from the listing of its sports car maker, Porsche AG, in September 2022.
Volkswagen reported its global new vehicle sales fell 7% last year to 8.3 million.
The automaker is rolling out new electric vehicle models across its brands that include VW, Audi, Porsche, Seat, Skoda, and Bentley. Still, the automaker trails key rivals both in total EV sales and in EV sales growth, according to ev-volumes.
