Volkswagen defies gloom, records 15% jump in profits
Europe’s biggest carmaker defied economic gloom by announcing 15% jump in operating profits in first three quarters of this year to €4.9bn (£3.8bn). Its net profit increased by 28.5% to €3.7bn.
Despite record profits, it indicated that earnings had squeezed in third quarter and last quarter was more difficult. It predicted that 2009 would be toughest year.
Volkswagen is the third largest carmaker in the world after Toyota and General Motors.
Porsche has acquired controlling stake of 74.1% and is vying for 75% stake next year. But VW’s financial officer, Hans Dieter Potsch, commented that Porsche’s plans would not materialise due to impending prolonged court battle.
The European Commission would be dragging Germany to the European court of justice for refusing to withdraw right of 20% blocking minority vote given to Lower Saxony under “VW law”, 1960.
The law was banned by the court last year but the revised law still retained veto on important decisions with state itself.
VW’s high performance sent its stock up 13%, valuing it at €174bn, more than total value of all European counter parts that are resorting to measures like production cuts and lay-offs. VW’s total sales increased 5.50% to €85.4bn. Deliveries were up 4% to 4.8m globally. The carmaker’s market share now stands at 10.1% against 9.6% last year. The group is confident of raising this share further in 2009 while the world market would be going down in 2009.
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