VW confident for 2019 despite car market crunch

File: VW said it was targeting an underlying sales margin this year of between 6.5 and 7.5 percent, compared with 7.3 percent in 2018. 

File: VW said it was targeting an underlying sales margin this year of between 6.5 and 7.5 percent, compared with 7.3 percent in 2018. 

AFP

BERLIN - German auto giant Volkswagen said it was confident it could defy a worldwide squeeze in car sales over the full year, although unit sales and operating profit fell in the second quarter.

Operating, or underlying profit before special items was down 8.1 percent year-on-year in April-June, at 5.1 billion euros ($5.7-billion), VW said in a statement.

Revenues grew 6.6 percent to 65.2 billion euros, although unit sales were down 2.8 percent at 2.8 million vehicles -- falling especially in the vital Chinese market.

And the group's bottom line surged 24.2 percent to 4.1 billion euros, due to a favourable year-on-year comparison with the second quarter of 2018 which was burdened with a one-off charge of 1.6 billion euros. 

VW "performed very well in a generally weaker overall market," finance director Frank Witter said.

The sprawling 12-brand behemoth continues to expect "slightly higher" unit sales this year than in 2018 "despite market conditions that remain challenging", and revenue growth of "up to five percent" on the 236 billion euros attained in 2018.

"The uncertain economic environment, the growing intensity of competition, volatile exchange rate trends and the more stringent registration requirements" remained the key risks, it said.

Nevertheless, VW said it was targeting an underlying sales margin this year of between 6.5 and 7.5 percent, compared with 7.3 percent in 2018. 

In the second quarter alone, the margin stood at 7.9 percent. 

Meanwhile, VW said the charges relating to its gigantic "dieselgate" emissions cheating scandal declined in the first six months of this year to just under one billion euros compared with 1.6 billion euros a year earlier. 

Since it was uncovered in 2015, the costs of cleaning up the affair have mounted to around 30 billion euros for the carmaker.

Source
AFP