Last year Volkswagen lost $6.6 billion after the company admitted to cheating on diesel emissions tests with almost 11 million cars worldwide affected by the scandal.
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Matthias Mueller, chief executive officer of Volkswagen AG, reacts during a news conference to announce the company’s fourth quarter earnings at the automaker’s headquarters in Wolfsburg, Germany, on Thursday, April 28, 2016.
The German vehicle maker, embroiled in a crippling emissions-cheating crisis, has set aside EUR16.2 billion ($18.32 billion) to fund the recall of millions of cars, legal claims and related costs, precipitating its worst-ever annual loss of EUR1.58 billion in 2015.
He was with Volkswagen for eight years.
The emissions scandal inevitably casts a long shadow. The company recorded a net loss of 1.5 billion euros ($1.7 billion) for calendar year 2015. Also because we know that we have disappointed many people – people who have placed their trust in Volkswagen.
VW set aside 16.2 billion euros ($18.2 billion) to cover the costs of the cheating, up from the previous amount of 6.7 billion euros, Europe’s largest carmaker said in a statement on Friday.
Volkswagen has tentatively admitted that it may have to sell off some of its existing assets in order to be able to meet the costs of dealing with its diesel emissions scandal.
Mr Muller also said VW was unable to disclose any further details about an agreement reached with USA authorities last week covering 500,000 vehicles which would see the group buy back vehicles or compensate owners. Volkswagen is a German multinational automotive manufacturing company. “Volkswagen is far more than crisis”, Mueller said.
The company said bonuses for individual top managers were 40% lower than they otherwise would have been because the company made a loss a year ago, even before the decision to withhold another 30%.
Volkswagen’s financial disclosure Friday, in a preliminary earnings report, came a day after the company agreed on the outlines of a plan to settle some United States of America legal claims, which would include giving owners of about 500,000 affected vehicles the option of selling the cars back to the company or having them repaired. Bonuses at Volkswagen are calculated based on the company’s performance over several years.
Volkswagen will soon form a legally independent company to promote business in mobility services, which can include things like ride-sharing apps and car-sharing, he said.
Last year, Volkswagen’s namesake vehicle unit reported a margin of 2 percent, down from 2.5 percent in 2014 and putting it further from a pre-crisis target for operating profit to rise to 6 percent of sales.
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Cost reductions at Europe’s largest automaker are “in full swing” at individual brands and across the group, Mueller said at Volkswagen’s (VW) earnings press conference on Thursday, reiterating a target for an operating margin of 5-6 percent, versus 6 percent a year ago, adjusted for special items.
