► VW financial results 2016 Q1
► Pre-tax profits tumble 20%
► But still makes €3.2bn
Volkswagen’s profits have fallen by 20% in the first quarter of 2016, as the aftershocks of the diesel emissions scandal continue to be felt in Wolfsburg.
The company announced pre-tax earnings slipped to €3.2 billion (£2.4bn), down €3.97bn (£3bn) in Q1 last year. Sales slipped by 1.2% in the quarter, to 2.58 million vehicles.
So profits fall, but VW’s still quite healthy then?
Many analysts were surprised that VW’s profits hadn’t fallen further. Group revenues fell by a modest 3.4%, to €51bn (£39bn) in the first quarter of the year, although results in the VW brand itself were hit hardest.
Confidence and sales have been hit hard after VW admitted installing ‘defeat devices’ to cheat diesel emissions tests in the US, leading to a global crisis as the 2.0, 1.6 and 1.2 TDI engines were affected in 11 million vehicles spread across sister brands Audi, Seat and Skoda.
VW has already set aside €16bn (£12bn) to mop up the problem, which will include physical fixes to affected cars as well as the prospect of compensation and lawsuits from hoodwinked owners.
The boss speaks
CEO Matthias Mueller said he was ‘satisfied’ with the figures in ‘what will undoubtedly be a demanding’ year. ‘2016 will be a transitional year for Volkswagen that will see us fundamentally realign the group,’ he added. ‘We remain confident that our operating business will again record solid growth this year.’
Volkswagen is attempting to reinvent itself as digitally-pioneering, electromobility-leading company. Witness the replacement for the Phaeton, which will be reinvented as an EV luxury car.
Click here to read about the man sent to save Volkswagen.