Volkswagen Made More Money Selling Fewer Cars In 2021

The COVID-19 pandemic has resulted in a peculiar market trend that has seenluxury manufacturers such as Bentleyand Rolls-Royce reach new financial records, particularly in the USA and China. It appears that despite the pandemic resulting in a financial crisis for many, some have benefited from some impressive monetary success.

The result of this is that demand for expensive cars has risen to an all-time high. Companies like Mercedes-Benz have taken note of this and hinted that it would be streamlining its offering to focus on a smaller offering of more premium products. Ferrari has also declared that it has no intention of creating more affordable models and would ramp up production of its more expensive curated cars. Another signifier of this trend is Volkswagen's latest financial report.

In the recently revealed figures, VW reveals its operating profit, before special items, has increased by 451% from $550,000,000 in 2020 to $1.105 billion in 2021. This is despite 2021 reflecting an 8% reduction in deliveries from 5.3 million to 4.9 million units. Severe lock-down restrictions mean that production was hindered in 2020 but it was nothing compared to the supply chain crisisthat seemingly has no end.

Volkswagen explains that strategy was key in maximizing income last year. Acknowledging the demand for more premium models, it dedicated more of its semiconductors to more aspirational models that are more likely to sell well. In doing so, it was able to record profits in both North and South America "for the first time in several years".