© The Financial Times Ltd 2016 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
October 27, 2011 12:03 pm
Volkswagen’s bid to overtake Toyota as the world’s biggest carmaker gained traction after it posted nine-month earnings that exceeded its total profit in 2010 and swelled its automotive division’s net cash pile to more than €21bn.
|Sales||Net profit||Earnings per share||Dividend|
In a week that saw France’s PSA Peugeot Citroën, it’s closest rival in Europe, warn on profits and announce 6,000 job cuts because of slower sales and pricing pressure, VW said it was still reporting higher sales on its home continent, but was keeping a watchful eye on developments.
Christian Klingler, the German carmaker’s head of sales, said there had been “more insecurity in the market” in the third quarter, and he expected this to continue in the final months of the year.
VW’s third-quarter revenues jumped 25 per cent to €38.5bn as the Wolfsburg-based carmaker enjoyed strong demand across its brands, which include Audi, Skoda and Bentley.
The company’s net profit more than trebled from €2.2bn to €7.1bn, but the result was heavily influenced by a multibillion-euro book gain on its options to buy down the remaining half of Porsche’s sports car operations that it does not already own.
VW said it still expected full-year revenue and operating profit to be “significantly higher” than in 2010, helped by brisk sales in China.
However, Europe’s top-selling carmaker said that continuing volatility in interest and exchange rate trends and commodities prices would have a damping effect on its earnings.
VW said debt problems in some eurozone countries and the end of scrappage subsidy programmes would affect demand for new vehicles in many west European markets in the fourth quarter.
“In light of the current economic uncertainties, we are continuing to monitor developments in the global automotive markets extremely closely,” Martin Winterkorn, chief executive, said.
VW said it was outperforming western Europe’s stagnant market, selling 9 per cent more vehicles in the year to September.
However, VW said demand for vehicles was “much lower” in Spain than a year ago. Sales at its Spanish Seat unit edged up just 3 per cent to 267,000 units in the first nine months of the year, a far lower growth rate than the rest of its brands.
“We believe there is a strong impact in Europe about the concerns about a possible debt crisis,” Mr Klingler said. “Some of our customers are a bit worried to buy cars.”
Even as VW comes closer to unseating Toyota as the industry’s biggest producer by unit sales, western Europe still accounts for 39 per cent of the vehicles it sells.
This came as German car- and truckmaker Daimler reported lower second-quarter earnings weighed down by weakness at its Mercedes-Benz division on Thursday.
Daimler reported third-quarter net profit of €1.36bn, 16 per cent lower than a year ago. The group’s earnings reflected both lower earnings at Mercedez-Benz and charges Daimler took to reflect the falling value of its investments in French carmaker Renault and Russian carmaker Kamaz.
Daimler said Europe’s debt crisis and fiscal austerity represented “an increasing burden on economic developments”.
However, the company said it still expected its businesses to keep growing this year, and upheld its forecast of earnings that would “very significantly exceed” the level in 2010.
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in