* Q2 operating profit beats high-end analyst forecast
* VW keeps goal to match year-earlier record profit
* Still aims to boost sales, deliveries to records
* Modular production bearing fruit - analyst
(Rewrites with to Q2 results, analyst comment and background)
By Andreas Cremer
BERLIN, July 30 Volkswagen posted a
surprise gain in second-quarter earnings, reaping the benefits
of new cost-cutting technology and growing sales of luxury cars.
Underlying earnings at Europe's largest automotive group
rose 4.9 percent to 3.44 billion euros ($4.56 billion), VW said
on Tuesday as it published key earnings figures a day ahead of
VW's results beat the 3.29 billion-euro high-end forecast in
a Reuters survey of analysts, who had been bracing for a 5.5
percent decline to 3.1 billion euros.
"These are excellent numbers," said Frankfurt-based Bankhaus
Metzler analyst Juergen Pieper. "The modular production drive is
clearly starting to pay off. Strong sales by Audi and Porsche
rounded off the rosy picture."
VW reaffirmed goals to match last year's record operating
profit of 11.5 billion euros and to push sales and deliveries to
new records as it counts on business improving over the course
of the year.
A new production architecture, or platform, enables VW to
design, engineer and build a wide variety of vehicle sizes and
shapes - from a subcompact Polo hatchback to a full-size,
seven-passenger crossover that's due in the United States in
The modular architecture, known internally as MQB, is being
implemented over the next four years at a cost of nearly $70
billion, estimates Morgan Stanley.
While upfront costs burdened results in previous quarters,
the potential pay-off looks compelling: projected annual gross
savings by 2019 of $19 billion, according to the bank, with
gross margins approaching 10 percent.
The overhaul "will have an increasingly positive effect" on
future earnings, VW said.
The multi-brand group withstood most of last year's slump in
core European markets and, thanks to its global presence,
continues to outperform rivals. First-half group deliveries,
including luxury nameplates Audi and sports-car maker Porsche,
were up 5.5 percent to a record 4.7 million, powered by gains in
North America and China.
VW is running extra weekend shifts at its main
Wolfsburg-based factory during the third quarter to meet excess
demand for a revamped Golf hatchback and the Tiguan compact SUV.
Still, signs are growing that VW is beginning to feel the
pinch. Group sales have been falling in Europe, Russia and Latin
America this year and deliveries edged up only 3.7 percent in
June, the third-smallest gain in 17 months.
"We are not completely immune to the intense competition and
the impact this has on business," VW said. "There will be
increasingly stiff competition in a challenging market
($1 = 0.7547 euros)
(Reporting by Andreas Cremer; editing by Maria Sheahan and Tom