Dieselgate gives Volkswagen whiplash

The manufacturer's badge is displayed on a VW car in London. Photo: REUTERS/Neil Hall

FRANKFURT - Volkswagen suffered whiplash from a massive engine-rigging scandal as profits slumped in the first quarter.

But the embattled German auto giant insisted on Tuesday that things were not as bad as they look.

The carmaker, once a paragon of German industry with ambitions to overtake Toyota as the world's leading automaker, has been plunged into its deepest crisis since it emerged in September that it installed emissions-cheating software in 11 million diesel engines worldwide.

The still incalculable costs of the so-called "Dieselgate" scandal -- including regulatory fines and legal costs -- pushed VW into the red for the first time in more than 20 years last year when it booked a loss of 1.6-billion euros due to the 16-billion euros in provisions it was forced to set aside.

And it is continuing to feel the fallout this year, its first-quarter results show.

VW's net profit slumped by 20.1 percent to 2.31-billion euros in the period from January to March, on a 3.4-percent decline in sales to 50.96-billion euros.

Operating profit rose by 3.4 percent to 3.44-billion euros, meaning the operating return on sales rose to 6.8 percent from 6.3 percent.

Volkswagen --which owns 12 brands in all, from VW to Audi, Porsche, Seat and Lamborhgini -- said in a statement that it "put in a solid performance in the first three months" of 2016, despite Dieselgate.

Reuters

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