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Sales on Rebound, VW Delivers 44% Earnings Increase

CEO Mueller declines to discuss possible sale of Ducati, but says it is reviewing its brand portfolio.

by on May.03, 2017

VW's U.S. sales are on the mend and the maker hopes to build momentum with the new Atlas SUV.

There appear to be two strong signs that Volkswagen is finally leaving its diesel emissions scandal behind: rebounding sales and a surge in earnings.

Though the German automaker has yet to completely wrap up the diesel crisis – it has yet to negotiate a settlement with shareholders, for one thing – it saw first quarter earnings jump 44%, handily beating expectations. After taxes, VW is reporting a profit of 3.4 billion euros, or $3.7 billion, compared to the 3.1 billion euro forecast by industry analysts, according to data gather by FactSet.

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A variety of factors worked in VW’s favor, including stronger sales in the U.S., while “Our efforts to improve efficiency and productivity across all areas of the Company are also paying off,” said Chief Executive Matthias Mueller.

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VW Brand Profit Slammed by Diesel Emissions Scandal Costs

U.S. remains "core market," says CEO Mueller.

by on Mar.14, 2017

VW CEO Matthias Mueller holds the wireless fob for the Sedric robotic car at the Geneva Motor Show.

Volkswagen revealed a classic good news/bad news scenario on Tuesday morning. After reporting record group profits last month for 2016, the automaker now says operating earnings at the flagship VW brand took a sharp hit as a result of the maker’s diesel emissions scandal.

The automaker has so far agreed to spend nearly $25 billion on fines and settlements in the U.S. alone as a result of the scandal, and that doesn’t include a hefty increase in marketing costs since the diesel engine rigging was revealed in September 2015.

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Nonetheless, Volkswagen Group CEO Matthias Mueller put a positive outlook on the maker’s current situation, insisting it was “back on track” after one of the worst crises in its eight-decade history. Mueller himself took home 7.8 million euros, or $8.5 million, in pay and other forms of compensation for 2016.

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VW Cutting 30,000 Jobs Worldwide in Wake of Diesel Emissions Scandal

Move is part of broader changes to shift product plans, improve efficiency.

by on Nov.18, 2016

VW CEO Matthias Mueller wants to double the carmaker's profit margin and shift its product mix.

Volkswagen AG will eliminate about 30,000 jobs, the majority of them in Germany, as it struggles to cut costs in the wake of a diesel emissions scandal that some analysts estimate will eventually cost it as much as $30 billion or more.

The cuts are expected to save the embattled automaker about 3.7 billion Euros, or nearly $4 billion annually, according to VW CEO Matthias Mueller. However, the move is meant to do more than simply help cover the costs of the diesel scandal.

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The job cuts are part of “the biggest modernization program in the history of the group’s core brand,” Mueller told reporters during a news conference at VW’s corporate headquarters in Wolfsburg, Germany.  “The VW brand needs a real shake-up,” he added, “and that is exactly what the future pact has turned out to be.”

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Volkswagen Delivers Solid Profit Despite Diesel Scandal

U.S. buyback program set to get underway.

by on Oct.27, 2016

The Porsche Macan helped drive big profits for the brand - and for parent Volkswagen AG.

As it begins to see its massive diesel scandal fade into the rearview mirror, Volkswagen AG reported Thursday a big jump in third-quarter earnings.

The German maker had a net, after-tax profit of 2.34 billion euros, or $2.55 billion. By comparison, VW went 6.7 billion euros into the red a year ago as it set aside funds to cover fines and legal costs triggered by the revelation it had rigged emissions tests on its 2.0- and 3.0-liter diesel engines.

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On Tuesday, a judge in San Francisco gave final approval to a nearly $15 settlement with U.S. and California regulators covering the smaller of the two powertrains. That includes up to $10 billion to buy back the 475,000 Audi and Volkswagen brand vehicles sold in the U.S. using that engine. VW says buybacks are likely to begin by mid-November, though the maker still hopes to come up with a technical fix for at least some of those vehicles.

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VW Delivers Profitable Surprise

Earnings “significantly higher” despite diesel scandal.

by on Jul.20, 2016

Regaining momentum: VW delivers a strong, first-half profit despite the costs of its diesel scandal.

Volkswagen AG beat its earnings forecast for the first half of 2016, delivering “significantly higher” profits even while setting aside another 2.2 billion euros, or $2.4 billion, to cover the growing cost of its diesel emissions scandal.

The news comes a day after New York and two other states filed suit against the embattled German maker, claiming senior executives had helped cover up the diesel emissions subterfuge. Last month, VW agreed to a $14.7 billion settlement covering its 2.0-liter diesel, a deal that includes $10 billion to buy back nearly 500,000 vehicles.  Most of the funds VW has so far committed to settle what it calls the “diesel issue” came out of 2015 earnings, however.

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For the first half of 2016, VW said it had an operating profit of 7.5 billion euros, or $8.25 billion. That would drop to 5.3 billion euros after factoring in the latest charges for the emissions scandal, money largely related to legal costs in North America.

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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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VW Investing $114 Bil in Bid for Global Sales Leadership

New products to get majority of investment.

by on Nov.22, 2013

The new investment program will see the CrossBlue concept put into production.

With a goal of becoming the world’s largest automaker in mind, Volkswagen AG plans to invest $114 billion to upgrade factories and roll out an array of new vehicles for its more than a dozen different brands.

The maker, currently third in global sales behind Japan’s Toyota Motor Co. and Detroit-based General Motors, has set a goal of being the world’s “leading” automaker by 2018, the period covered by the latest plan – which calls for an investment of 84.2 billion euros. At the same time, the maker hopes to reduce spending on property, plants and equipment by 500 million euros annually.

“We will continue to invest strongly in our innovation and technology leadership,” Chief Executive Officer Martin Winterkorn said in the statement. “This will give us extra power on our way to the top.”

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Over two-thirds of the planned investment will go into product, according to Volkswagen, perhaps no surprise considering the wide range of brands the maker has added over the years. VW’s Automotive Group now covers everything from small and economy vehicles, with the Seat and Skoda lines, to luxury and ultra-premium models, with Audi, Lamborghini and Bentley.  Since Winterkorn  took the helm in 2007, it has added Scania and MAN trucks, the Ducati motorcycle company – and completed a challenging takeover of sports car maker Porsche.

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VW Posts Solid Second Quarter Despite Net Profit Decline

Rival Peugeot slides deeper into a hole - yet investors cheer.

by on Jul.31, 2013

VW's net fell sharply - but that was largely due to its takeover of Porsche.

At first glance, it might have seemed a tough quarter for Volkswagen AG. After all, the maker’s net profit tumbled by half compared to year-ago levels. But the 2% jump in operating earnings is what analysts and investors are focusing on.

VW’s net was hammered largely by the anticipated, one-time costs associated with its takeover of German sports car manufacturer Porsche. The operating income, up 1.8% year-over-year, tells how the maker was able to hold its own in what it called a “difficult market environment.”

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In fact, an even clearer picture of that environment emerged from the earnings report posted by VW’s French rival PSA Peugeot Citroen which saw its losses climb to 426 million euros for the first half of the year due to declining European car sales and a strike by workers protesting its plans to close factories, reduce capacity and eliminate 8,000 jobs.

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VW Earnings Plunge 38% as Euro Market Collapses

Maker remains world’s third-best seller.

by on Apr.24, 2013

Despite the strong reviews for the new Golf, VW earnings were hit hard by problems in Europe.

The ongoing collapse of the European automotive market took a heavy toll on the world’s third-largest automaker by unit sales, Volkswagen AG reporting a 38% decline in first-quarter profits.

The maker previously had been able to offset the worst of the European downturn by counting on strong demand in other key markets, especially China. But the results of the first quarter shows it is being caught up in the same net that is expected to hammer earnings for essentially all manufacturers operating on the Continent – including Ford and Daimler, both of whom also reported earnings today.

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Europe’s biggest automaker said it earned 1.95 billion euros, or $3.15 billion, for the January-March quarter, down from 3.15 billion euros a year ago. Revenue, meanwhile fell 1.6 percent, to 46.57 billion, due to what VW called “negative effects from declining European markets.”

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Booming Sales Put Volkswagen of America Back in the Black

First profit in over a decade.

by on Mar.29, 2013

Workers at the new VW plant in Tennessee have had trouble meeting the growing demand for the American-made Passat.

For the first time since the original Beetle dominated the American import market, Volkswagen of America is moving solidly back into the black.

The German maker’s U.S. sales and marketing arm had steadily lost sales, share – and lots of money – ever since Asian rivals like Toyota and Honda became dominant forces in the market back in the late 1970s. In fact, VW’s decline was so severe that the maker came close to abandoning the U.S. in the early 1990s.

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But, over the last several years, it has picked up significant momentum with a mix of new products, aggressive marketing – and the addition of its first U.S. factory in decades, in Chattanooga, Tennessee.

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