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VW brand profit plunges, Porsche lifts group

Thursday, October 27, 2016 - 01:41

Volkswagen has raised its guidance for group revenue this year and is targeting slightly higher profitability after posting higher autos sales in the third quarter. As Hayley platt reports, Europe's largest automaker expects group revenue to match last year's 213 billion euros after predicting in July that revenue would fall by as much as 5 percent this year.

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Up one day, down the next. Two days after reaching an agreement over diesel emissions with U.S. regulators Volkswagen released third quarter results. Not all bad, but the operating profit of its core brand plunged by more than half - well below forecast. A supplier dispute added to the cost of the emissions scandal. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "Reputationally this damage is going to take a while to move past but we are seeing signs that we are indeed moving past and while we wait for this to happen, which it inevitably it will I think, it's good to see that other divisions within the business are helping to provide some growth for the company." Its premium Porsche brand delivered 3.3 billion euros of third quarter earnings - beating expectations. And VW brand sales for year-to-date weren't looking too bad either. They gained 6.7 percent last month thanks to strong demand from China and Europe - its strongest growth in 2.5 years. VW has now raised its forward guidance for the year. After previously predicting revenue would fall 5 percent. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "I think what they need to do right now is get people to focus on other aspects of the business, on other offerings that are available and try and move past the crisis rather than maybe deflect attention else where." VW will pay $14.7 billion to US authorities for the emissions debacle and cost cuts haven't been ruled out. It's now trying to shift focus away from fumes altogether, by making more electric and self-driving vehicles.

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VW brand profit plunges, Porsche lifts group

Thursday, October 27, 2016 - 01:41