Surprise gains at Volkswagen as sales surge

City A.M. Reporter
VOLKSWAGEN (VW) boosted operating profit by 10 per cent in the first quarter despite shrinking demand for vehicles in the car maker’s western European core markets and spending on a technology overhaul.

Operating profit increased to €3.21bn (£2.6bn) from €2.91bn a year earlier, the German car maker said in a statement yesterday, beating analysts’ expectations for a drop of almost nine per cent to €2.7bn.

VW reaffirmed its outlook for 2012, saying it aims to match last year’s operating profit of €11.3bn and increase revenue from the €159.3bn achieved last year.

Relying on continued expansion of car markets in Asia, the United States, Latin America and Russia, VW stood by its goal to increase deliveries beyond last year’s record 8.3m vehicles.

VW’s group auto sales increased 9.6 per cent in the first quarter to a record 2.16m units.

The company said it had seen particularly strong underlying results from its Chinese joint ventures and from Porsche.

A day earlier, French maker PSA Peugeot Citroen forecast a tough second quarter on sagging demand in its core domestic and southern European markets, while Renault said its first quarter sales dipped 8.6 per cent.

Car sales in Europe fell for a sixth straight month in March, with a 6.6 per cent decline, data from industry association ACEA showed earlier this month.

Increases in the German and British markets were not enough to offset declines in France and Italy.