Volkswagen income rises after record sales of luxury brands

City A.M. Reporter
VOLKSWAGEN said yesterday third-quarter operating profit rose by a fifth on the back of record sales at premium brands Audi and Porsche, keeping the carmaker on track to meet full-year targets.

Operating profit at Europe’s largest automotive group rose to €2.78bn (£2.3bn) from €2.32bn a year ago.

VW reaffirmed goals to match last year's record operating profit of €11.5bn and to push sales and deliveries to record levels this year. But the company said the targets are “very ambitious given the extremely difficult economic environment”.

“We are focusing on disciplined cost and investment management,” finance chief Hans Dieter Poetsch said. “That’s particularly important given the fact that the economic environment isn't expected to improve in the short term.”

A plan to switch production of small and medium-sized models at its four main passenger-car brands to a new modular platform “will have an increasingly positive effect” on the group’s cost structure, VW said.

Analysts have warned that the new MQB vehicle platform, designed to cut production costs and shorten assembly times, will keep weighing on profits and its savings may miss ambitious targets.