Investment and financial planning
To meet people’s needs for individual, sustainable, fully connected mobility and thus increase the Volkswagen Group’s future viability, we will continue to mobilize our strengths in innovation and technology and push Volkswagen’s transformation into becoming a provider of sustainable mobility. We aim to use our economies of scale and maximize synergies.
In our current planning for 2024, most of the capex (investments in property, plant and equipment, investment property and intangible assets, excluding capitalized development costs) will be spent on new products, the ongoing electrification of our sites and model portfolio, and the further development of our platforms. Examples include the all-electric platform for our volume brands – the Modular Electric Drive Toolkit (MEB) – and the Premium Platform Electric (PPE) for our vehicles in the premium and sports segment. With the Scalable Systems Platform (SSP), we are also developing a successor platform that is meant to combine the requirements of the volume, premium and luxury brands and generate high levels of synergy in the future. We are also placing emphasis on the growing digitalization of our vehicles and sites and increasing our capital expenditure on these. There will also be a strong focus on creating battery manufacturing capacity with the aim of establishing a battery supply chain under our own control. This particularly applies to the North American market, where we have significantly
expanded our activities by launching the new Scout brand. Attention will also be directed towards a growing presence in the Chinese market, where we will also increase our local activities.
Besides capex, investing activities will also cover additions to capitalized development costs. Like capex, they reflect, among other things, upfront expenditures in connection with updating and electrifying the model range as well as for digitalization and technologies of the future. Also included are the services of CARIAD, which is the company synergistically developing the software architecture of the future for Group brand vehicles.
With the investments in our facilities and models, as well as in the development of electrified drives, platforms and in digitalization, we are laying the foundation for profitable, sustainable growth at Volkswagen. These investments also include commitments arising from decisions taken in previous fiscal years. The Automotive investment ratio is expected to be between 13.5% and 14.5% in 2024.
We aim to finance the investments in our Automotive Division from our own capital resources and expect cash flows from operating activities to exceed the Automotive Division’s investment requirements. We expect net cash flow for 2024 to be between €4.5 and €6.5 billion. This will include in particular investments for the future and cash outflows from mergers and acquisitions for the battery business field, which represent a vital pillar of the Volkswagen Group’s transformation. Net liquidity in the Automotive Division in 2024 is expected to be between €39 billion and €41 billion.
These plans are based on the Volkswagen Group’s current structures.
Our equity-accounted joint ventures in China are not included in the figures above. For 2024, these joint ventures plan to invest in e-mobility, further optimization of the model portfolio, the development of new mobility solutions and digitalization. Their capex will probably exceed the 2023 level and be financed from the companies’ own funds.
In the Financial Services Division, we are planning lower investment in 2024 than in the previous year. We expect the development of lease assets and of receivables from leasing, customer and dealer financing to lead to funds tied up in working capital, of which almost half will be financed from the gross cash flow. As is common in the sector, the remaining funding requirements will be met primarily through unsecured bonds on the money and capital markets, the issuing of asset-backed securities, customer deposits from the direct banking business, and through the use of international credit lines.