Volkswagen has posted its first operating loss in 15 years in the wake of its emissions scandal.
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European nations have been lopsidedly affected by the emissions scandal since Volkswagen is based in Germany and exports millions of cars to European Union countries. Mueller said costs would likely grow as the company faces lawsuits and regulatory fines.
Excluding that provision, operating profit would have remained stable at 3.2 billion euros in the three-month period, VW said.
“The fiscal burden is tremendous but manageable… but we’ll emerge stronger and more slender than in the past”. While group sales in all-important China fell by 5.2 percent over the first nine months, the earnings of VW’s Chinese joint ventures remained stable. By the middle of next year, he’ll draft a plan through 2025, saying Europe’s largest carmaker can no longer be “steered by yesterday’s principles and structures”.
The European Commission released a statement which said the difference between test results would be allowed because of the “technical limits” in the short-term improvement of diesel cars. On Wednesday, the financial consequences of the fraud began to become apparent. A 29% incline in net liquidity to 27.8 billion euros for the quarter, and limited increase in fund provisions set for scandal costs, reflect positively on the company’s ability to withstand the ongoing crisis. Volkswagen Group is a sprawling, global company with a number of local and regional brands; depending on just how deep this scandal cuts, it’s possible that Müller’s organization could need to drop poorly performing brands entirely, as General Motors did as it went through bankruptcy in 2009.
The group, which also owns the Audi and Porsche brands, has admitted that a few of its diesel vehicles had software that could make their emissions look relatively clean during testing.
Reserves may keep growing in the fourth quarter when proceeds from a transaction involving VW’s holding in financing company LeasePlan, valued at 3.7 billion euros, are expected to be booked, analysts said. They plunged as much as 38% in the weeks after the scandal broke in late September, but have since bounced back – helped by evidence that the impact on sales has been limited, and a broad rally across German markets.
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VW shares were trading up 1.1 percent at 106.3 euros at 1322 GMT. However, VW said that it was still forecasting a rise of up to 4 percent in sales revenue for the whole of the year.
