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November 6, 2018

VW Passenger Cars operating profit dips in first nine months

Volkswagen Passenger Cars said deliveries and sales revenue remained above the 2017 level in the first nine months of 2018.

By Olly Wehring

Volkswagen Passenger Cars said deliveries and sales revenue remained above the 2017 level in the first nine months of 2018.

Vehicle deliveries rose 2.9% year on year to 4.6m while sales revenue rose 7.3% to EUR62.5bn.

At EUR2.3bn, the operating profit before special items was slightly below the 2017 level (EUR2.5bn) as a result of factors including the expected impact of the WLTP changeover and higher distribution expenses in connection with scrappage trade-in incentives in Germany.

Operating return on sales was 3.7% versus 4.3%.

The "diesel issue" led to the booking of special items of EUR1.6bn (2017: EUR2.6bn).

"The development in sales and growth over the first nine months has been gratifying. We still need to improve our operating return" – COO Brandstaetter

Chief operating officer Ralf Brandstaetter said: "The development in sales and growth over the first nine months has been gratifying. We still need to improve our operating return. We continue to work in a highly disciplined way to make Volkswagen even more competitive."

"Since the beginning of our transformation, we have made considerable progress. The WLTP changeover has had a temporary negative impact but the underlying structural improvement of our earnings power has continued unabated," said VW group finance head Arno Antlitz.

"At the same time, the challenges we face call for further sustained improvements in the brand's earnings power. This will be essential if we are to reach our long-term goal of making Volkswagen fit for the future and actively shaping the mobility of the future."

Forecasts for the full year were confirmed – Volkswagen Passenger Cars expects sales revenue to grow by up to 10%.

It also expects an operating return before special items of 4% to 5% for the current fiscal year.

"However, in view of the negative impact of the WLTP changeover, higher distribution expenses and investments made in new products – especially for the implementation of the electric offensive – the operating return will probably be at the lower end of the [range] stated," the automaker added.

VW Group Q3 operating profit down 18.6%

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