Volkswagen turnover rises despite global slump in car sales in Q1

Source: Xinhua| 2019-05-02 22:38:53|Editor: Mu Xuequan
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BERLIN, May 2 (Xinhua) -- Turnover of Volkswagen rose by 3.1 percent to a total of 60 billion euros (67.2 billion U.S. dollars) in the first quarter (Q1) of the 2019 fiscal year, the German car maker announced on Thursday.

This increase in turnover would have been due to "mix improvements", meaning that Volkswagen was able to sell more high-priced cars, as well as a good business development in the German car manufacturer's financial services division.

Additionally, Volkswagen group had also benefited from an advantageous exchange rate development. In recent months, the euro has fallen significantly against the U.S. dollar.

However, Volkswagen sold slightly fewer vehicles in the first quarter of 2019 than in the same period last year. Sales across all brands of Volkswagen such as Audi, Porsche or Skoda fell by 2.8 percent to a total of 2.6 million vehicles.

"The Volkswagen Group is once again off to a good start this year," commented Frank Witter, chief financial officer (CFO) of Volkswagen, on the company's Q1 figures.

Despite the increase in turnover, profits of Volkswagen declined by 300 million euros and stood at 3.9 billion euros in Q1. This decline had been due to "negative special items arising from legal risks".

In Q1, the Wolfsburg-based car manufacturer allocated another 1 billion euros to its reserves for legal proceedings and lawsuits, mainly arising from the ongoing dispute around manipulated exhaust thresholds. In total, the reserves at Volkswagen for the so-called Dieselgate are now amounting to around 30 billion euros.

Volkswagen's core brand VW recorded an increase of 7.1 percent in turnover and accounted with 21.5 billion euros for over one third of the German car maker's total turnover in Q1.

Volkswagen luxury brand Audi, however, reported a weaker business in Q1 as turnover of Audi fell by around 1.5 billion euros.

According to Volkswagen, improvements in the mix and margins as well as positive exchange rates could not compensate for the "adverse effects" of new car model launches and phase-outs as well as fluctuations in Audi's car model range caused by the new Worldwide Harmonized Light Vehicles Test Procedure (WLTP) testing procedure.

"Amid continuously challenging market conditions", the German car maker is still expecting to "slightly exceed" its prior year figure in car sales in 2019. Challenges in the current year would particularly arise from the economic situation, increasing intensity of competition, exchange rate volatility and stricter WLTP requirements, according to Volkswagen.

Investors on the stock market reacted positively after the publication of Volkswagen's quarterly figures. Share prices of the German car maker temporarily went up by over 5 percent and were the clear winner of the German stock index DAX on Thursday.