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VW Back in the Black but Diesel Scandal Takes a Stiff Toll

Profits down 20% year-over-year.

by on May.31, 2016

VW gets back into the black for Q1, but the maker see lower sales and smaller margins for all of 2016.

Volkswagen AG clawed its way back into the black during the first quarter of this year following the spectacular plunge it took last year as it dealt with a global diesel emissions scandal.

Even so, the maker’s $2.6 billion profit for the January-March quarter was down 20.1% from year earlier numbers. Excluding one-time items, VW’s operating profit was down 5.9%, to $3.5 billion. Sales and other revenues, meanwhile, slipped 3.4%, to $56.8 billion.

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“In light of the wide range of challenges we are currently facing, we are satisfied overall with the start we have made to what will undoubtedly be a demanding fiscal year 2016,” VW CEO Matthias Mueller said in a statement.

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Celebration Low-Key as Beijing Auto Show Opens

Chinese sales plunge, prices and profits under pressure.

by on Apr.25, 2016

Chinese biggest auto show of the year opened to international media on Monday.

Dozens of cars, trucks, concepts and crossovers are making their debut at the Beijing Auto Show today, everything from locally made battery-electric vehicles to Ford’s big F-150 Raptor pickup.

But the tone at the event is decidedly lower key than in the past, and for obvious reasons. This year marks the first time since the Chinese automotive market shifted into high gear at the beginning of the Millennium that sales are expected to grow at a single-digit pace.

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And, after years of struggling to keep up with booming demand, even as they spent tens of billions of dollars opening up new plants, automakers now face the very real possibility that China could soon face a very different situation, something more common in Europe and North America: over-capacity.

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VW Sales Drop Below 10 Mil in Wake of Diesel Scandal

But other problems also cut into demand.

by on Jan.08, 2016

The VW badge gracing the maker's BUDD-e concept minivan revealed this week at CES.

The diesel emission scandal is likely to hammer Volkswagen to come, the maker facing a new federal lawsuit and at least 450 civil cases filed by owners – but the impact is already being felt by an automaker that entered 2015 literally on top of the world.

VW today revealed it sold 9.93 million vehicles through its varied brand portfolio last year, a decline of 2% worldwide. Dropping below the 10 million mark comes as more than just a psychological setback. It also means the German maker will fall into second, and possibly even third, place in the global automotive sweepstakes once its rivals all tally up their numbers.

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And VW has rapidly been losing momentum, December sales slipping 5.2% worldwide and 10% in the American market – where it was sued by the U.S. Justice Department on Monday. The maker could face as much as $20 billion in fines for violating the Clean Air Act by using a so-called “defeat device” to illegally pass emissions tests.

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Volkswagen Retains Sales Lead in China

Maker stays on top over GM despite diesel scandal.

by on Dec.15, 2015

As Chinese auto sales slow, Volkswagen remains atop the rankings there: ahead of GM.

While sales of the Volkswagen brand have taken a beating in a several corners of the globe, VW sales have increased in China and helped the maker hang on to its edge over General Motors in the battle for leadership in the soft Chinese market.

Overall, the Volkswagen passenger cars brand, which doesn’t include the maker’s other brands, such as Audi, Porsche and Seat, has delivered 5.34 million vehicles to customers from January to November this year. VW sales, however, dropped 2.4% during November despite stronger sales in China.

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“Developments in world markets, which are in some cases tense, and their effects on the Volkswagen passenger pars brand will continue until the end of the year,” said Jürgen Stackmann, the executive in charge of Volkswagen sales. (more…)

China’s Car Market Hits a Speed Bump

Plunging stocks sap consumer spending.

by on Jul.09, 2015

A Chevy Cruze in China.

When trade industry officials forecast that the Chinese automotive market would grow by about 7% to 8% this year much of the rest of the industry turned green with envy. But for China, that was a severe retrenchment after years of double-digit growth.

Now, it seems, even that forecast may have been too optimistic, however. Car sales began to slow down earlier this year, along with the rest of the country’s economy. But demand in recent weeks has taken a sharp plunge as the Chinese stock market shows signs of a full-fledged meltdown.

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Though it remains the world’s largest new vehicle market, year-over-year sales fell 3.2% in June, according to the China Passenger Car Association, to a total of 1.43 million. That marked the country’s first down month since February 2013.

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Volkswagen Goes Big With C-Coupe GTE

Chinese-only model hints at new Phaeton flagship to come.

by on Apr.20, 2015

Volkswagen C Coupe GTE made its debut in Shanghai. The model will be VW's flagship in China.

It wasn’t all that long ago that Chinese motorists had to wait to see the debut of products already on sale in other parts of the world. These days, a growing number of manufacturers are introducing some of their newest products first in China, the world’s largest automotive market.

And more than a few of these vehicles will – at least initially – only be offered for sale in the booming Asian nation. That’s the case with the next-generation Ford Taurus, as well as the new Volkswagen C Coupe GTE that is making its debut at this week’s Shanghai Motor Show.

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Measuring a full 200 inches in length, with a 76-inch width, this is no Beetle or Golf, but a car aimed for premium buyers who might not want to go all the way up to an Audi. Indeed, the C Coupe is the first model from Volkswagen to share the larger MLB “architecture” primarily designed for the Audi brand, rather than VW’s smaller MQB. (more…)

Toyota Could Lose Sales Lead to VW This Year

Japanese giant plagued by problems in China.

by on Jan.26, 2015

A Toyota dealership in China was burned in 2012. Weak demand there could let VW pass the Japanese giant.

Toyota’s worldwide sales surged 3% last year, once again positioning the Japanese giant as the world’s top-selling automotive manufacturer. But with Toyota officials glumly anticipating a modest decline in 2015, the Japanese maker could cede leadership to its ambitious German rival Volkswagen AG.

Assign credit – or blame, if you prefer – to China. VW continues to dominate the world’s largest automotive market even while Toyota struggles to gain traction there. Japanese makers, in general, have had serious problems making headway in China, especially after tempers flared due a dispute between the two Asian nations over ownership of a chain of strategically placed islands.

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At one point, rioters burned a Toyota dealership and damaged 100s of Japanese vehicles. Sales have only slowly begun to recover, but Toyota’s sales in China are still barely a third of those of the market’s top two manufacturers, Volkswagen and General Motors.

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Toyota Maintains Global Sales Lead – Barely

VW closing gap as GM settles into third spot.

by on Jul.30, 2014

Strong demand for new models, such as the redesigned Corolla, helped Toyota retain the sales lead for the first half of 2014.

While its lead has been narrowing, Toyota Motor Co. retained its crown as the world’s best-selling automaker during the first half of 2014.

The maker edged out rivals Volkswagen AG and General Motors in the global sales sweepstakes as demand for its cars, trucks and crossovers surged to 5.097 million between January and June, a 4% increase fueled by growth in markets ranging from U.S. and Europe to China and the Japanese home islands.

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That was not only an all-time record but exceeded forecasts – while positioning Toyota to meet a goal of becoming the first automaker ever to sell 10 million vehicles in a single year. VW is also shooting for the 10 million mark, though preliminary data indicate it only tallied sales of 4.97 million vehicles during the first half, GM following at 4.92 million.

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Volkswagen Investing $2.7 Billion in China

Two new plants add to plans for $27 billion investment.

by on Jul.07, 2014

VW will launch the e-Golf and an assortment of other battery-based vehicles in China.

Volkswagen stoked the competitive fires today in the race to become the top auto brand in China by announcing plans to invest $2.7 billion to build two plants in the country.

The investment is in addition to the previously announced plans to plow about $27 billion into the country by 2018. VW last year nudged past archrival General Motors to become the largest automaker in China.

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“China has become our largest and most important market,” said Prof. Dr. Martin Winterkorn, chairman of VW’s board of management. “To satisfy the demands of our customers in the country, we are engaging in a further substantial expansion of our capacities in China together with our Chinese partner FAW Volkswagen.” (more…)

VW Plugging Into Chinese EV Market

Maker promises to invest $27 bil over 5 years.

by on Apr.20, 2014

VW will launch the e-Golf and an assortment of other battery-based vehicles in China.

With Beijing’s traffic choked roads as a backdrop, Volkswagen announced a major initiative to put tens, perhaps 100s of thousands of electric vehicles on the road in China before the end of the current decade.

VW chief executive officer Martin Winterkorn said VW and its key Chinese partners were prepared to spend as much as $27 billion in the next five years on electric vehicles in China.

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“The Volkswagen Group is once again assuming a pioneering role in China and launching the biggest initiative for e-mobility in China’s automotive history”, s said. Martin Winterkorn,

The initiative gets underway with the launch this year of the Volkswagen brand’s electric Up! and e-Golf models in China.

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