Volkswagen Reports 86% Jump in First-Quarter Profits

The group -- whose brands include VW, Audi, Skoda, SEAT and Bentley in the passenger-car sector and MAN and Scania in trucks -- said it outperformed the market in all regions and its share of the global passenger-car market increased to 12.2%.

Volkswagen AG -- Europe's biggest automaker -- on Thursday said its profits raced ahead in the first three months of this year, driven by strong demand worldwide for all of its brands.

Volkswagen (IW 1000: 10) said it booked net profits of 3.2 billion euros ($4.2 billion) in the period from January to March, a year-over-year increase of 86%.

Underlying earnings, as measured by operating profit, revved up 10.2% to 3.2 billion euros, as the auto giant sold 11.3% more vehicles -- 2.26 million worldwide -- in the three-month period, it said.

Revenues motored ahead 26.3% to 47.3 billion euros.

The numbers beat analysts' expectations, driving VW shares 5.6% higher on the Frankfurt stock exchange to 133.25 euros.

VW attributed its better-than-expected performance to "strong demand for its group models worldwide."

The group -- whose brands include VW, Audi, Skoda, SEAT and Bentley in the passenger-car sector and MAN and Scania in trucks -- said it outperformed the market in all regions and its share of the global passenger-car market increased to 12.2% from 11.9% previously.

Audi recently announced its acquisition of Ducati, the Italian maker of some of the most sought-after high-speed motorcycles in the industry.

VW said it hopes to expand its market position still further with the launch of a large number of new models this year.

On the back of this, "we expect to increase deliveries to customers year-on-year ... and group sales will exceed the prior-year figure" of 159.3 billion euros, it said.

On the level of earnings, "our goal for operating profit is to match the 2011 level" of 11.3 billion euros, VW said.

Nevertheless, the group is facing "increasingly stiff competition in a challenging market environment, especially in certain European countries," it cautioned.

Sales in western Europe, currently trying to fight off recession in wake of the debt crisis, dipped by 1.2% in the first quarter, with declines of 17.3% seen in Italy and 9% in Spain.

By contrast, sales in central and eastern Europe rose by 35.1% in the January-March period, North American sales were up 24.5% and sales in China gained 15.6%.

Among the different brands, unit sales of both the VW and Audi brands rose by just over 10%. The only brand to sustain a drop in business was SEAT of Spain, where unit sales fell by 11.6% and its operating loss widened to 29 million euros.

Overall, CEO Martin Winterkorn said he views the coming months "with confidence."

By comparison, French carmakers PSA Peugeot Citroen (IW 1000: 43) and Renault SA (IW 1000: 73) both saw business decline at the start of the year, while U.S. automakers such as Chrysler, on the other hand, saw profits rise sharply.

Copyright Agence France-Presse, 2012

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish