Volkswagen (VOW.DE) revealed a strong first quarter on Thursday, raising its full-year guidance on the back of increased sales and profits.
Europe’s largest car manufacturer said revenue rose 13% to €62.4bn ($75.2bn, £54bn) in the first three months of the year, while pre-tax profit jumped to €4.5bn from €0.7bn the year prior.
It now expects operating return on sales of between 5.5% and 7% in 2021, compared with the previous range of 5% and 6.5%.
Volkswagen also raised its expectations for net cash flow and new liquidity for the year.
Global market share of passenger cars grew by 0.2 percentage points to 12.4% in the first quarter, thanks to increased demand in China. The group was also lifted by strong performances from its upmarket brands Porsche and Audi
Watch: VW lifts profit goal on strong premium car demand
Sales of electric cars and SUVs doubled to 133,300 units, including 59,900 battery electric ones. The remainder were plug-in hybrids. Volkswagen expects 25% of European sales to be all electric in 2025.
The company added “assuming successful containment of the COVID-19 pandemic”, it anticipates deliveries to customers in 2021 will be significantly up on the previous year.
Shares in Germany were trading flat on Thursday.
The positive trading update came despite the impact of COVID-19 and a shortage of semiconductors affecting the automotive industry.
The global chip shortage has put pressure on a number of carmakers who are competing directly with tech companies and the consumer electronics sector for supply.
At the beginning of the pandemic, many car manufacturers cancelled orders due to fear of a long downturn in sales. However, as sales have started to recover they have now found themselves at the back of the queue for these microchips.
The shortage is expected to last for some time as it can take up to two years to get semiconductor production factories up and running. Chips are also not easy to make, with advanced semiconductors taking up to six months to produce.
“The shortage of semiconductors throughout the industry is expected to have a more significant impact in the second quarter than before,” chief financial officer Arno Antlitz said.
“Nevertheless, we are confident regarding business development in the full year and have therefore raised our outlook.”
Barclays Equity Research analyst Kai Alexander Mueller said VW had made a strong start to the year and described its raised profit forecast as “conservative”.
It came as Aston Martin (AML.L) posted a smaller first quarter loss in 2021 of £42.2m as sales more than doubled.
In the first quarter of the year, total sales to dealers climbed to 1,353 vehicles, and the firm said it was maintaining its full-year guidance that volumes will stand at around 6,000 vehicles.
It hopes to reach around 10,000 cars and revenue of roughly £2bn ($2.78bn) 2024/25.
Watch: Chip shortage forces automakers to get creative