Business Development

The world economy recorded positive growth in 2024. Global demand for vehicles was slightly higher than in the previous year. Amid a challenging market environment, the Volkswagen Group delivered 9.0 million vehicles to customers.

DEVELOPMENTS IN THE GLOBAL ECONOMY

The global economy remained on a growth path in 2024 with somewhat slower momentum than in the previous year. This trend was seen in both the advanced economies and the emerging markets. Declining but in some cases still relatively high inflation rates in many countries, combined with restrictive monetary policies introduced by some central banks, continued to put a damper on economic growth in many places. Since around the middle of the reporting year, a number of these central banks have started to gradually bring down key rates from their comparatively high level.

Europe/Other Markets

In the reporting year, the economy in Western Europe exhibited positive growth overall, somewhat higher than the prior-year level. Development in the individual countries in Northern and Southern Europe was mixed. In response to declining inflation rates, the European Central Bank lowered its key interest rates in four steps, starting in June 2024. The economies in Central and Eastern Europe recorded overall growth in 2024 that was somewhat higher than in the prior-year period.

Germany

German gross domestic product decreased somewhat in 2024, showing a similar trend to the previous year. Compared with 2023, the seasonally adjusted unemployment figures rose slightly on average over the year. After reaching historically high levels in late 2022, monthly inflation rates have since fallen broadly in step with the Eurozone average.

North America

In the USA, gross domestic product in the reporting year grew at a somewhat slower pace than in the previous year. On account of relatively high inflation and a tight labor market, the US Federal Reserve initially maintained its restrictive monetary policy. After the first key rate cut in September, interest rates were reduced twice more before the end of the reporting year. Canada’s economic growth was just under the prior-year figure, but in Mexico the slowdown was more pronounced.

South America

In Brazil, economic output grew at an unchanged pace, while there was a stronger decrease in the pace of growth in Argentina compared with the previous year.

Asia-Pacific

In the reporting year, China’s economy expanded at a high level compared with other parts of the world, but fell somewhat short of the prior year. There was relatively sharp growth in India’s economy, though also at a slower pace than in 2023, while Japan’s economic output decreased somewhat.

ECONOMIC GROWTH

Percentage change in GDP

EXCHANGE RATE TRENDS

In 2024, the euro remained almost unchanged against the US dollar on an annual average. This followed a prior year in which the euro had already been relatively weak due to the high uncertainty surrounding developments in the global economy. The euro depreciated slightly against sterling on average over the year, but appreciated in most cases against the currencies of the emerging markets. In particular, the Argentinian peso and Turkish lira lost value against the European single currency due to the persistent, extremely high rates of inflation. Compared with 2023, the Brazilian real and the Mexican peso were also weaker than the euro on average. Against the South African rand, the euro’s value was virtually unchanged on an annual average. The Chinese renminbi and the currencies of several emerging markets in Asia depreciated slightly against the euro year-on-year.

EXCHANGE RATE MOVEMENTS FROM DECEMBER 2023 TO DECEMBER 2024

Index based on month-end prices: as of December 31, 2023 = 100

INTEREST RATE TRENDS

The ongoing trend of falling inflation rates allowed central banks in several countries to cut their key interest rates in the reporting year. On average worldwide, however, key interest rates remained elevated. National central banks in nearly all of the major Western industrialized nations made corresponding adjustments to their key interest rates to prop up the domestic economy. Key interest rate cuts were also recorded in many emerging markets.

COMMODITY PRICE TRENDS

After the commodity markets had largely eased in fiscal year 2023, prices of some industrial metals were at a similar or slightly higher level in the reporting year. Lower prices were commanded for battery materials and precious metals in 2024 than in the previous year, in some cases, considerably lower. Compared with the previous year as a whole, the average prices for the commodities lithium, cobalt, nickel and coking coal fell significantly. The average decline in prices for the commodities iron ore and lead were less pronounced by comparison. By contrast, prices for natural rubber, copper and aluminum rose. The price of crude oil remained virtually unchanged. Averaged over the year, the prices of the precious metals rhodium and palladium also recorded a significant decline, while the price of platinum remained almost unchanged compared with the prior year.