Tag Archive | "Volkswagen"

VW Net Soars as Sales Rise, Euro Falls

FRANKFURT—Volkswagen AG posted a sharply higher second-quarter net profit on Thursday thanks to higher vehicle sales and weak euro, which boosted revenues earned abroad, reported The Wall Street Journal.

“We were able to expand our position in the international automotive markets even further. We shall systematically extend our competitive position on the way to becoming the world’s leading automaker,” Volkswagen Chief Executive Martin Winterkorn said in a statement.

Volkswagen, with a stable of brands that includes Audi AG, Skoda, Seat and Bentley, as well as its own VW brand, has recently stated that it wants to overtake Toyota Motor Co. to become the world’s biggest auto maker.

Net profit jumped to €1.25 billion ($1.62 billion) for the three months ended June 30, from €283 million a year earlier, when car sales collapsed amid the global economic crisis. Revenue rose to €33.2 billion from €27.2 billion.

Favorable exchange rates had a positive impact on Volkswagen’s profit. With the euro weaker against the dollar, earnings generated in the U.S. were inflated when converted into the common currency. The Chinese Renminbi is also effectively still tied to the dollar.

VW’s Chinese operations, which are consolidated at equity and thus aren’t included in the company’s operating profit figure, earned the equivalent of €802 million in the first half of the year.

The Audi premium brand remained VW’s biggest earnings contributor with €1.33 billion operating profit in the first six months compared with €823 million in the prior-year period. Audi has closed the gap on the world’s two largest premium auto makers, BMW AG and Daimler AG, posting sales gains for most of the last 10 years.

Operating profit at the core VW brand rose to €1.03 billion from €216 million last year, while first-half losses at the Spanish Seat brand and the Bentley marque narrowed slightly to €157 million from €159 million and €109 million from €114 million, respectively. VW doesn’t release second-quarter results for its different divisions.

Net liquidity in Volkswagen’s automotive division soared 42 percent to €17.5 billion at the end of the second quarter from €12.3 billion last year.

VW holds a 29.9 percent stake in German truck maker MAN SE and speculation has been swirling for months that it might raise its stake to help foster cooperation with VW’s own Swedish truck maker, Scania. VW also bought a 49.9 percent stake in Porsche Automobil Holding SE’s sports-car unit last year and plans to complete a complex merger with the holding firm in 2011.

Volkswagen’s earnings underscore a broad recovery in the automotive industry after a gloomy 2009, when demand for cars and trucks contracted sharply amid tight credit markets and a jittery economic environment.

But Europe’s largest auto maker by sales emerged relatively unscathed from the industry gloom compared to most rivals, thanks partly to its strong presence in China, a small exposure to the U.S. market and a revival in demand in Germany last year as a result of state-backed scrapping incentives.

Volkswagen, however, reiterated previous statements that the dynamic growth experienced in the first six months “will not continue undiminished in the second half of the year.”

Volkswagen posted a 16 percent annual rise in vehicle deliveries in the January-to to June period to 3.61 million cars and trucks. Some analysts have cautioned that the enormous growth in China in recent months might start to slow, and that the recent recovery in the U.S. appears fragile. Additionally, the European market is heading for a downturn in coming months after the effects of various scrapping initiatives begin to wane.

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Volkswagen Plans ‘Significantly’ Higher Operating Profit, Sales

Volkswagen AG, Europe’s largest carmaker, said operating profit and deliveries may rise “significantly” this year as demand increases in major markets and the euro’s decline against the dollar helps sales abroad, Bloomberg reported.

Five-month sales of cars and sport-utility vehicles, as well as operating profit, “considerably outperformed expectations,” Wolfsburg, Germany-based Volkswagen said today in a statement. The expansion “looks set to continue” in June, the company said.

“Volkswagen is focusing spending on the lucrative growth markets and its vast model range already now beats that of many competitors,” said Stefan Bratzel, director of the Center of Automotive at the University of Applied Sciences in Bergisch- Gladbach, Germany. “They seem extremely well-positioned for any post-recession market revival.”

Volkswagen is targeting a second consecutive year of record deliveries as it adds 60 models, including upgrades, in 2010. The carmaker will build its 10th plant in China as part of a plan to double production capacity in its biggest market to 3 million vehicles within four years, VW said on June 9.

China, where Volkswagen is investing 6 billion euros ($7.4 billion), is critical to Chief Executive Officer Martin Winterkorn’s goal of surpassing Toyota Motor Corp., the world’s biggest carmaker, in sales and profitability by 2018. VW’s sales in the world’s biggest auto market surged 48 percent in the first five months to 777,800 vehicles.

“Volkswagen expects a good first half of 2010,” the manufacturer said today, although development in the second half “still entails uncertainties.”

The company delivered 6.29 million cars and SUVs last year and reported operating profit of 1.9 billion euros.

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VW Takes Aim at Toyota to Turn U.S. Profit With Jetta

Volkswagen AG plans to cut the U.S. price and increase the size of the Jetta compact car, its best-selling model in the country, as the automaker aims to make its U.S. operations profitable by 2013, reported Bloomberg.

The revamped Jetta will be about 3.5 inches longer and about $1,700 less than the current version when U.S. sales start in October, the Wolfsburg, Germany-based company said in a statement. A hybrid version will sell in two years.

Volkswagen, Europe’s largest automaker, is shifting more production to North America to help trim costs and compete with small-car leaders Toyota Motor Corp. and Honda Motor Co., Stefan Jacoby, chief executive officer of VW’s U.S. unit, said yesterday in an interview. The company is aiming to almost double sales in the market by 2012, to 400,000 units for its namesake brand, compared with 213,454 vehicles last year.

“Model by model, our lineup will be competitively priced so that we will be able to compete in the American market,” Jacoby said yesterday at a press briefing to introduce the car in New York.

Moving more production to North America from Europe provides Volkswagen with a hedge against currency fluctuations and shaves costs, Jacoby said. He restated the company’s goal for North American output to rise to 75 percent of sales in the region by 2013 from about 60 percent last year.

Volkswagen will be completely independent of the euro- dollar exchange rate by 2012 or 2013, and the U.S. business will be profitable by then, Jacoby said. The German company, which reported a profit of 960 million euros ($1.18 billion) last year, doesn’t break out results for the U.S., and Jacoby declined to give specifics for how much the business lost in the market last year.

Volkswagen plans to sell the 2011 Jetta for about $16,000, down from the current base of $17,735. That would bring the model closer to the starting prices of Toyota’s Corolla and Honda’s Civic, now $15,450 and $15,455, respectively, according to the companies’ websites.

“They’re going after big-volume products,” Jeff Schuster, executive director of global forecasting at market-research firm J.D. Power & Associates in Troy, Mich., said in a telephone interview.

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VW Recalls 15,902 Vans Built by Chrysler

DETROIT — Volkswagen AG notified U.S. safety regulators that it is recalling 15,902 of its 2009 Routan minivan over a possible wiring problem that could lead to a fire, The Wall Street Journal reported.

Chrysler Group LLC assembles the vehicles for VW at its Windsor, Ontario plant.

Chrysler itself announced Monday it was recalling 318,974 of its Chrysler Town & Country and Dodge Grand Caravan minivans because of the same wiring problem. The minivans are made at the same plant.

Under certain conditions, the lower sliding door hinge bracket can make contact with some internal wiring installation, which may cause a fire within the rear sliding door. Both companies have had no reports of injuries or accidents associated with the problem.

Volkswagen said in a statement posted on the website of the National Highway Traffic Safety Administration that it will start the recall sometime this month although a date was not provided.

General Motors Co. earlier this week recalled 1.5 million vehicles with heated washer-fluid systems following engine fires that continued to occur even after a fix was made in 2008. Also Suzuki Motor Corp. recently recalled 46,549 of its Grand Vitara and XL-7 vehicles over the possibility of a plastic piece breaking off the tension adjuster pulley.

The recalls underscore a hypersensitivity within the auto industry to quickly initiate recalls following the plight of Toyota Motor Co. The auto maker was fined $16.4 million for failing to notify NHTSA of defects that led to gas pedals “sticking” in the acceleration mode even when a driver’s foot had been lifted.

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Volkswagen Aims to Sell More Than 10 Million Cars by 2018

Volkswagen AG, Europe’s largest carmaker, said it plans to increase sales to more than 10 million vehicles by 2018 as it seeks to dethrone Japan’s Toyota Motor Corp., reported Bloomberg.com.

VW’s management board approved business targets, including profit margins, measured by earnings before interest and taxes, of at least 5 percent for the automotive business in the “medium term,” Wolfsburg, Germany-based Volkswagen said in a statement today. The target doesn’t include Porsche SE, which will be integrated by 2011, it said.

Volkswagen CEO Martin Winterkorn has a target of beating Toyota, the world’s biggest carmaker, in global deliveries and profit margins. VW sold 6.29 million cars and sport-utility vehicles worldwide last year, an increase of 1.1 percent from 2008. Toyota said last month that 2009 vehicle sales including those of affiliates fell 13 percent to 7.81 million vehicles. The Japanese carmaker is dealing with a global vehicle recall because of accelerator pedals that may stick.

By 2018, Volkswagen, which includes the Audi luxury division and Czech unit Skoda, should have a pretax profit that exceeds 8 percent of sales, the company said.

Volkswagen fell 18 cents, or 0.3 percent, to 65.72 euros after rising as much as 1 percent on the Frankfurt exchange before the announcement. The automaker has a market value of 25.7 billion euros ($36 billion).

“With the implementation of ‘Strategy 2018,’ the Volkswagen group is seeking global economic and environmental leadership in the automotive industry by 2018,” VW said in its statement. The plan would include “significant cost cutting, in part through the more prominent use of the modular design principle.”

VW foresees steps to promote research and development of hybrid and electric cars, according to the statement. VW will also maintain “strict discipline” on spending and aim to keep the expenditure on fixed assets in auto-making at about 6 percent of sales in the medium and long term.

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Volkswagen to Add Eight Audi Models to Challenge BMW

Volkswagen AG’s Audi brand aims to add eight models by 2015, challenging BMW AG as the world’s largest maker of luxury cars, reported Bloomberg.com.

Audi will invest 7.3 billion euros ($10.5 billion) on new models and plant upgrades through 2012, the Ingolstadt, Germany-based automaker said in a statement. Spending on new models will total about 5.9 billion euros, or 81 percent of the budget for the four-year period that includes 2009.

The investment is part of Wolfsburg, Germany-based Volkswagen’s plans to spend 25.8 billion euros between 2010 and 2012 as it seeks to become the world’s dominant automaker. Audi, which ranks third behind BMW and Daimler AG’s Mercedes-Benz brand, will increase its lineup of cars and sport-utility vehicles to 42 models by 2015 from 34 now, it said.

Audi’s new vehicles will include the A1 compact, which is due to be introduced in mid-2010. As BMW develops a line of small urban vehicles and Mercedes-Benz prepares to invest 1.4 billion euros to expand its small-car lineup, the A1 will become Audi’s lowest-priced model, spokesman Armin Goetz said in a telephone interview today.

The VW division will also introduce the A7, a large luxury-coupe that will compete with BMW’s 6-Series and Mercedes-Benz’s CLS. By the end of 2010, Audi will start selling a hybrid-version Q5 SUV, its first vehicle that combines an electric motor with a conventional engine. Audi will start producing the E-tron electric-powered sports car by the end of 2012.

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