Volkswagen will book a €500 million ($US585 million) special charge this quarter because of poor sales of its luxury Phaeton model line and a revaluation of its Bentley unit, Reuters reported, citing the Frankfurter Allgemeine newspaper.
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The news agency noted that VW had said last week it would take a hit of a “couple of hundred million euros” this year after revaluing some fixed assets and development costs, which would knock operating profit down to just under half last year’s €4.76 billion, but had declined to be drawn on the size of the charge or to pin it on any specific model programme.
Analysts had told Reuters they believed the charge would be around €200 million to €300 million and related primarily to VW’s ill-fated Phaeton luxury saloon, an expensive and widely-criticised project which has suffered from disappointing sales.
According to Reuters, the newspaper quoted industry sources in an article released on Monday as saying that the write-downs would add up to €500 million, and that the bulk of that would be on Phaeton development costs.
Another hit would be a a write-down on the value of VW’s British unit Bentley, the luxury brand which VW bought for around €500 million in 1998, and in which it has invested another €720 million since, the paper said, according to Reuters.
