(Bloomberg) — Volkswagen AG said an improving supply-chain situation and strong demand for vehicles bode well for the second half of the year, as the carmaker reported second-quarter results that beat expectations.
Deliveries have recovered noticeably in recent weeks, VW said Thursday, joining Mercedes-Benz AG and rival Stellantis NV with solid predictions on car buying as the battle to secure enough semiconductors eases. While reporting robust earnings, VW is still reeling from the July 22 ouster of its Chief Executive Officer Herbert Diess, who will be replaced by Oliver Blume, the head of the company’s Porsche brand.
The company’s shares rose as much as 3.1% in early trading in Frankfurt.
VW expects availability of cars across its premium and mass-market brands to improve, after it prioritized production of higher-end models as the supply jam curbed output. Since the start of the semiconductor crisis, the strategy has helped deliver strong returns for manufacturers, cushioning the blow from a slump in deliveries.
Europe’s biggest carmaker, counting four CEOs since 2015, swapped out its leader after shortcomings in its software unit delayed important models like the Porsche Macan SUV. Blume, a former Audi trainee with a strong operational track record, will also need to navigate an increasingly brittle business environment plagued by Europe’s energy crisis and record inflation.
The Cariad software unit made progress during the second quarter with updates of driver assistance features and new functions for lane changes and automated parking, VW said.
While car demand is still outrunning supply, Volkswagen is pitching a listing of its prized Porsche brand into an increasingly gloomy economic outlook. The company has hired a dozen banks to push the share sale targeted for the fourth quarter, in what could become Europe’s largest IPO. Blume leading both VW and Porsche hasn’t thrilled potential investors already concerned about governance issues with a lack of independence for the sports-car maker from its parent company under current plans.
Operating profit before special items, which included a partial reversal of hedging gains on commodity contracts, fell to 4.7 billion euros ($4.8 billion) for the three months ending June, compared with analyst forecasts of 4.1 billion euros.
(Updates with share move in third paragraph)
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