Volkswagen chief executive Oliver Blume’s overall pay package rose by 6.5 per cent in 2024 despite taking a €1 million salary cut, as net profits at the automotive group slid by almost 31 per cent.
Europe’s largest motor group sold nine million vehicles worldwide in 2024, a 2.3 per cent decline on the previous year, with losses in the crucial Chinese market and the cost of closing its Audi plant in Brussels outstripping growth in South America and stable sales in North America and Europe.
Company accounts showed group turnover up 1 per cent to €324.7 billion while profit after tax slumped to €12.3 billion, down from €17.8 billion in 2023.
While sales were down, its annual report highlighted an 88 per cent increase in orders in 2024.
“In a challenging competitive environment, we succeeded in delivering a decent result overall in 2024,” said VW chief financial officer Arno Antlitz. “It is crucial that we continue to offer our customers highly attractive vehicles, while consistently reducing costs and increasing profitability. This will be our focus in the coming months and years.”
Analyst attention on Tuesday focused on salaries of executive board members, a year after they promised to take a 5 per cent cut in fixed salary.
In addition, at their last board meeting, VW group executives agreed a further 11 per cent cut on all earnings in this and next year as part of a push to reduce €15 million from costs.
After strikes and stand-offs, Mr Blume described the agreement struck in December with unions – with salary cuts but no factory closures – as setting a “decisive strategic course” which would mean consistent implementation in 2025.
“With the ramp-up of affordable e-mobility, our autonomous vehicle fleet and the battery cell production in Germany, Volkswagen is showcasing European innovation for the world – as the global automotive tech driver,” added Mr Blume.
Despite a cut to his VW chief executive salary, Mr Blume’s total earnings in 2024 rose by about 6.5 per cent to €10.35 million due to stock-related bonuses and a rise in his second salary as chief executive of VW subsidiary Porsche.
Last week VW gave a first glimpse of its newest model: the €20,000 Every1 EV, due to go on sale in 2027 and manufactured at VW’s plant in Portugal.
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Until then, the financial future of the VW group remains uncertain with news of a big global recall to replace faulty airbags from its Japanese supplier, Takata, believed to affect at least 100,000 vehicles from 20 different manufacturers.
On Monday VW announced it was reintroducing physical buttons for key functions on all models. Drivers criticised the embrace of touchscreens and menu systems as overly complicated – and dangerous – while VW design chief Andreas Mindt described the touchscreen push as a “mistake”.
“From the ID2 onwards, we will have physical buttons for the five most important functions – the volume, the heating on each side of the car, the fans and the hazard light – below the screen,” he said. “It’s not a phone, it’s a car.”
