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Two German auto giants - Volkswagen and Mercedes-Benz - posted declining profits on Tuesday, with sales under pressure.
Volkswagen reported that profits fell sharply at the start of the year as vehicle sales slipped but confirmed its outlook for 2024.
Net profit stood at 3.7 billion euros (R75 billion) from January to March, down more than 20 percent from a year earlier.
However the figure was higher than 3.3 billion euros expected by analysts surveyed by financial data firm FactSet.
Sales were 75.5 billion euros, down slightly from a year earlier, although better than expected.
"Our first quarter results show a slow start to the year," said Arno Antlitz, chief financial officer of Volkswagen, whose 10 brands range from Porsche to Seat and Skoda.
"We remain confident of achieving our financial targets for 2024," he said, citing "solid" orders.
The launch of more than 30 new models as well as previously announced savings programmes will boost VW as the year progresses, he said.
Volkswagen sold 2.1 million vehicles in the first quarter, down two percent from a year earlier. Sales rose in Asia-Pacific and South America but slipped in Europe and North America.
An increase in fixed costs also weighed on the carmaker.
But it said orders remained "stable at a high level" and confirmed its outlook for 2024, with sales revenue expected to grow by up to five percent.
Volkswagen is facing a host of challenges, ranging from fierce competition, including from new rivals in key market China, to a costly shift to electric vehicles that is moving slowly.
Last year, it announced plans for a 10-billion-euro savings programme to boost profitability and has flagged plans to cut its workforce over the coming years.
Merc sales fall by 8%
Meanwhile, another German auto manufacturer, Mercedes-Benz, on Tuesday said profits fell significantly in the first quarter as supplier issues hit luxury car sales.
Net profit in the first three months of the year dropped 24.6 percent compared with the same period in 2023, down to three billion euros (R60 billion) from four billion euros.
The figure was better than a prediction by analysts surveyed by financial data firm FactSet, who had forecast a figure of 2.8 billion euros.
Revenues in the first quarter fell by 4.4 percent to 35.9 billion euros as a result of the sales hit.
Mercedes said in a statement its performance had been boosted by "lower raw material prices, tight cost control" and a strong performance in its vans division.
Revenues in the utility vehicles segment were up six percent in the first quarter to 4.9 billion euros.
The increase propelled a 22.4-percent rise in the division's operating profit to 933 million euros - a closely watched measure of underlying performance.
The strength of the van business however failed to offset a difficult quarter for the group's core car unit.
A first-quarter drop of 7.5 percent in revenues, which fell to 25.7 billion euros, was down to "supplier bottlenecks and model changeovers in the top-end segment", the group said.
Unit sales of cars were down eight percent to just under 463,000, Mercedes said. The drop was matched in battery vehicles with some 47 500 units sold.
The result reflected "solid results in all regions except Asia", Mercedes said.
Looking ahead, Mercedes kept its outlook unchanged, saying it expected supply issues to ease over the course of the year.
"Sales levels in the first quarter are seen as the trough, with second quarter volumes expected to be better," the group said.
Overall Mercedes said it expected sales in 2024 to match those in the previous year.
Additional reporting by News24
