VW to pay EUR6,200 in bonuses to its German workers, 1,000 euros lower than in 2012

Article by Anita Panait, on March 4, 2014

Volkswagen will be paying its 100,000 workers in Germany a bonus of EUR6,200 ($8,500) each, which is EUR1,000 less than 2012 and EUR1,300 less than 2011.

The lower bonus comes as the carmaker’s namesake brand posted lower sales and profit in Europe, caused by the still slumping demand for vehicles in the region. The brand posted a 3.9-percent drop in sales in western Europe in 2013 to 811,800. Volkswagen distributes 10 percent of operating profit at the brand to workers as bonuses.

VW works council chief Bernd Osterloh said in a statement that the tougher market situation has a direct effect on the size of the bonus for the workers.

VW, which is the largest carmaking group in Europe, is softening its forecast for 2014 due to the continued uncertainty in European vehicle markets.

The carmaker posted a record operating profit for 2013 on higher luxury-car sales and falling costs of a manufacturing revamp. VW is bound to release a brand-by-brand breakdown of results and executive compensation details on March 13. The carmaker has 12 brands.

Overall, the VW Group produced 5.1 percent more vehicles in 2013 (9.727 million) from 9.255 million in 2012. The Group sold 4.1 percent more vehicles in the year at 9.7 million from 9.255 million in 2012. The VW Group posted EUR197 billion in sales revenues in 2013, compared to EUR192.68 billion in 2012. This represents a 2.2 percent surge.

This allowed the VW Group to log an increase of 1.5 percent in operating profit from EUR11.5 billion in 2012 to EUR11.67 billion in 2013. Nonetheless, profit before tax at the VW Group dropped 51.2 percent from around EUR25.49 billion in 2012 to EUR12.43 billion in 2013. Profit after tax plummeted 58.2 percent from about EUR21.88 billion in 2012 to around EUR9.15 billion in 2013.

In its annual report, the VW Group said it expects the trends in the passinger car markets in different regions to be mixed, with the overall growth in global demand for new vehicles in 2014 to be slower than in 2013. The carmaker said that for 2014, it expects a slight recovery in vehicle demand in Germany and Western Europe. It added that that passenger car markets in Central and Eastern Europe would be able to just surpass the prior-year level.

As for North America, the VW Group sees the upward trend in the region to weaken in 2014, while in South America, the passenger car markets would be around the same level as in 2013. Nonetheless, the VW Group expects further growth in the Asia-Pacific region in 2014, although it might be slower than in 2013.

The VW Group expects its sales revenues for 2014 to improve by 3 percent over its figure in 2013.

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Topics: vw, germany

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