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Strong start to 2014 for Volkswagen

Hole in one: Strong sales of the Golf small car in markets including Australia have helped push up Volkswagen Group’s earnings globally despite difficult conditions in some markets.

Rising global demand helps VW bump up first-quarter earnings

30 Apr 2014

VOLKSWAGEN Group has posted a strong start to 2014, growing worldwide sales revenue by 2.7 per cent over the same first-quarter period last year despite what it called “difficult” conditions.

The global result was boosted by a strong performance in the Asia-Pacific region, the car-maker said, with Volkswagen Australia posting a 5.8 percent sales increase compared with the first three months of last year based mainly on the performance of its Golf small car range.

“Global demand for passenger cars continued to rise in the first quarter of 2014,” VW said in a statement announcing the first-quarter result.

“However, market trends were mixed at a regional level. The number of new registrations in the Asia-Pacific region, Western Europe, North America and Central Europe increased year-on-year, while the emerging markets in South America and Eastern Europe recorded lower market volumes.”

Earnings rose to 47.8 billion euro ($A71.2 billion) for the first three months of the year on the back of 2.56 million sales globally, it said.

It was mixed results for the company’s passenger car brands, though, with some performing better than others.

Luxury brand Audi’s 1.3 billion euro profit fell flat as it invested heavily in “new products and technologies”, as well as a costly expansion to its production network.

Budget brand Skoda, meanwhile, earned 185 million euro, a big 65.2 percent jump over the previous year “on the back of volume and mix-related factors”, while VW Group’s other economy brand, Seat, fell into a 36.0 million euro hole, even though earnings were up by 10 million euro on the previous quarter’s loss.

Meanwhile, uber-luxury brand Bentley gained even more strength, with profit climbing 65.7 per cent to 45 million euro compared with the same quarter last year.

Porsche – which announced overnight that it now employs more than 20,000 workers – also experienced a 100 million euro-plus jump in first-quarter earnings to post a 698 million euro result.

Volkswagen’s commercial vehicle division also performed strongly, more than doubling its operating profit to 136 million euro when compared with the same three-month period last year.

Volkswagen Australia earlier this year moved into offering financial services via a publicly listed company for new and used cars based on the success of similar ventures overseas.

According to Volkswagen, its global financial services arm earned 353 million euro for the company in the first quarter of this year.

Volkswagen Group said it expected a “moderate” increase in deliveries to customers in 2014.

“We offer an extensive range of environmentally friendly, cutting-edge, high-quality vehicles for all markets and customer groups that is unparalleled in the industry”, Volkswagen board of management chairman Martin Winterkorn said.

He said the Volkswagen Group would press ahead with its product initiative across all brands in 2014, and modernise and expand its offering by introducing attractive new vehicles.

“We are pursuing the goal of offering all customers the mobility and innovation they need, thus sustainably strengthening our competitive position,” Mr Winterkorn said.

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