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Tuesday, 12 November

Chickens Coming Home for VW

The latest set of figures from Volkswagen is pointing to the setting aside of a huge chunk of money to cover likely legal and regulatory consequences of the emissions ‘cheating’ scandal. 

The car manufacturer has set aside €6.7 billion to cover the expected cost of the scandal, leaving it with a €2.52 billion pre-tax loss for the third quarter of the year, making it the first quarterly loss for 15 years.

On the plus side, the Volkswagen Group generated an operating profit before special items of €10.2 billion in the first nine months of the year.

Sales revenue grew by 8.5% to €160.3 billion. The operating return on sales before special items amounted to 6.4%.

However, earnings were adversely affected by charges of €6.7 billion in the third quarter for forthcoming measures relating to the emissions cheating scandal on some diesel models. As a result, operating profit after special items amounted to €3.3 billion. Profit after tax was €4 billion.

“The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear,” stated Matthias Müller, Chairman, Board of Management, Volkswagen Aktiengesellschaft. “We will do everything in our power to win back the trust we have lost.”

The major brands comprising the VW Group recorded good performances, given market conditions, for the first nine months of 2015 which must make the catastrophic finding of emissions cheating particularly galling for both management and staff:

Audi lifted operating profit to 4 billion due to sales growth, positive changes in the mix and favorable exchange rate movements

Article written by Mike Gannon

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