VW profit jumps 22% in Q1, boosted by Audi, Porsche

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BERLIN -- Volkswagen Group's first-quarter operating profit rose 22 percent from a year earlier, as earnings from the Porsche and Audi brands helped to offset falling profitability at the automaker's core VW brand.

Earnings before interest and taxes increased to 2.86 billion euros ($3.97 billion) from 2.34 billion euros a year earlier, VW said in a statement today. First-quarter revenue was up nearly 3 percent to 47.8 billion euros ($66.25 billion).

"The Volkswagen group has established a strong position in recent years," and "our good start to the current fiscal year is an additional proof of this," CEO Martin Winterkorn said in the statement. "We must now continue improving our position and maintain our successful cours."

Rebounding demand in Europe helped Audi brand and Porsche to boost first-quarter deliveries by 12 percent and 5 percent to 413,000 and 38,700 units.

All VW car brands except the group's Seat division posted profits in the quarter.

VW brand's operating profit was 440 million euros ($609.9 million), down from 590 million the year before. Profit was hit by lower sales volumes, negative exchange rate trends, especially in South America and Russia, and higher upfront investments in new technologies, VW said.

Audi’s operating profit at 1.3 billion euros ($1.8 billion) was the same as in the first quarter of 2013, impacted by high upfront investments in new products and technologies, as well as in the expansion of Audi's production network outside Germany.

Porsche's profit rose to 698 million euros ($967.4 million) from 573 million. Bentley’s operating profit increased to 45 million euros ($62.4 million) from 27 million.

New models and higher vehicle sales helped Skoda to boost profit by 65 percent to 185 million euros ($256.4 million). Seat narrowed its loss to 36 million euros ($49.9 million) from 46 million.

Earnings report
Download PDF, above left, for VW Group's first-quarter earnings report and press release.

VW stuck to the cautious outlook it published in February, even though core European markets that account for 40 percent of group sales have increased volumes for seven straight months.

VW's group operating margin may be broadly flat this year, coming in a range of 5.5 percent to 6.5 percent, after 5.9 percent last year, VW said, reiterating its Feb. 21 statement. That compares with 2013 car division margins of 8.8 percent at Toyota and 9 percent at Hyundai.

VW said last month that it may sell more than 10 million vehicles for the first time in 2014, up from 9.7 million last year, four years earlier than planned.

VW plans to introduce 100 new or revamped cars through next year as part of a strategy to overtake Toyota as the global leader in auto sales by 2018.

Reuters and Bloomberg contributed to this report.

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