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VW’s big jump in profits shows the cost for ‘Premium’ badges

Thu, 14 Mar 2013

Volkswagen’s profits jumped by £5.7 billion to £25.5 billion with sales numbers up by one million. But the big profits come from ‘Premium’ badges.

What’s in a name? Extra profit for VW seems to be the answer if you’re buying a VW Group car.

Volkswagen has released it sales and profits for 2012, showing an increase in sales across the group’s brands of one million units, and profits up by a sizeable £5.5 billion to £25.5 billion on revenues up by 21 per cent on 2011 at £167 billion. Very strong figures.

And just about all the VW Group companies performed strongly, although Skoda did see profits drop (all those VAT free offers) and SEAT had a bit of a nightmare with sales down more than 8 per cent, reflecting the dire state of Spain’s economy.

But perhaps the most interesting snippet to come out of VW’s impressive performance is just how much extra VW’s premium marques make on car sales than the mainstream models.

VW sold 5.7 million cars with a VW badge and made profits of £3.1 billion – a profit per car of just under £550 – whilst Audi sold 1.5 million cars and made profits of £4.7 billion – a profit per car of  over £3000. So it seems the cost of having the Audi badge on your car instead of a VW one is £2,500.

Similarly, Bentley made over £10,000 on each of the 8,500 cars they sold in 2012 and Porsche made almost £6,000, whilst the profit on a Skoda was just £650 and poor old SEAT lost over £400 on every car they shifted out of the showroom.

The headline numbers are the vanity for VW in its quest to become the biggest car maker in the world, but the sanity is in the strong profits on premium marques, particularly the comparison between VW and Audi.

Which explains VW’s big push to make Audi the number one ‘Premium’ marque.

By Cars UK