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Profits rise at VW

October 30, 2014

Europe's biggest carmaker, Volkswagen, has reported a strong rise in quarterly profits, buoyed by record sales of Audi and Porsche cars. Its core brand, however, continues to struggle.

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Symbolbild - VW
Image: Getty Images/S. Gallup

Group operating profit for the third quarter rose by 16 percent to 3.2 billion euros ($4 billion), vehicle sales were up 4.1 percent, with a record 2.43 million cars sold. The Audi and Porsche divisions, which account for two thirds of total earnings, did particularly well.

Strong sales in China and Europe means the Wolfsburg-based company will be able to stick to its full-year profit target. It expects an operating profit margin between 5.5 percent and 6.5 percent, after 5.9 percent last year.

"Given the group's current performance, I am convinced that we will meet our goals for fiscal year 2014," Chief Executive Martin Winterkorn said.

The carmaker's core VW brand, however, is grappling with stagnant sales, high fixed costs and spending on technology. Operating profit in that division fell by one-fifth to just 1.7 billion euros. Winterkorn has announced measures to cut costs at VW by 5 billion euros annually.

ng/uhe (Reuters, AFP)