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Volkswagen posts quarterly profit despite drop in sales

Volkswagen returned to profit in the third quarter as surging Chinese demand for luxury cars helped offset a 1.1% drop in vehicle deliveries due to the pandemic, sending its shares as much as 3% higher on Thursday. The German automaker's return to the black comes amid spiking coronavirus cases in Europe that led governments in France and Germany to order their countries back into strict national lockdowns on Wednesday. "The coronavirus remains a central problem," Volkswagen Chief Financial Officer Frank Witter said in a conference call with reporters. "This situation now is anything but relaxed." But Witter said the group expected the economic recovery to continue and did "not anticipate any nationwide lockdowns in larger markets." Witter said the takeover of U.S. truck maker Navistar International by Volkswagen's trucking unit Traton was an important acquisition, but the "current economic climate will not make this easy." Volkswagen reiterated it expects to post a profit for the full year, saying its business "recovered noticeably" in the third quarter as sales in China of premium vehicles, including Audi and Porsche sports cars, rose 3%. The quarterly performance was also aided by a series of cost-cutting measures launched earlier this year. Volkswagen said its net liquidity rose to 24.8 billion euros from 18.7 billion at the end of the second quarter. Excluding one-time items, third-quarter operating profit was 3.2 billion euros ($3.8 billion), down from 4.8 billion euros a year earlier, but up from a second quarter loss of 1.7 billion. In a note to clients, Jefferies analyst Philippe Houchois described the results as a "solid performance with strong cash, but relatively muted in the context of the (auto) sector recovery." Last week, German rival Daimler reported a record 24% jump in Chinese demand for its Mercedes-Benz cars, boosting its margins in the third quarter. Italian-American Fiat Chrysler Automobiles and Peugeot manufacturer PSA Group both also posted solid results this week. Witter said Volkswagen could not say for sure whether it would meet EU CO2 emissions targets this year, adding "it will be a tough race." At 1030 GMT, Volkswagen shares were up 2.9% at 129.20 euros. Related Video: Earnings/Financials Audi Bentley Bugatti Lamborghini Porsche Volkswagen

The Audi Q7 doesn't want me to speed and I'm not totally okay with that

I'm a big fan of adaptive cruise control. My commute is 50 miles each way, almost all on freeways here in Michigan. If everyone drove at the same speed there'd be little need for smart cruise, but I live in reality where people camp out in the left lane and practice going from the gas to the brake for no apparent reason. Radar cruise systems let me set my max speed and just worry about steering. But Audi has gone a step further with its adaptive cruise system. And it's a step I'm not sure I'm comfortable with. Audi's system, as featured on the new Q7, has a feature that uses the forward-facing camera to read speed-limit signs, something that's becoming common in Europe and is now making its way here in the continent's luxury cars. That part's fine; it's useful information and gets nicely integrated into Audi's Virtual Cockpit screen and on the head-up display. What the car then does with that info, however, is the issue: If your set cruise speed is higher than the speed on a sign you pass, the car will drop the cruise speed down to the limit. But it's not perfect. On one stretch of highway, the Q7 picked up the speed limit posted on the parallel service road, dropping me down from a little above the limit to 30 mph. It didn't slam on the brakes, but it did confuse me at first and require intervention before the car slowed down to a crawl. This feature isn't ready for primetime. Luckily, it can be turned off or switched to a mode where it gives you a warning that the speed limit has changed (or at least that the car thinks it has) and lets you react before the set cruise speed is changed automatically. When activated, it's a safety issue. A more serious one, in my opinion, than driving a little over the speed limit, especially when it means interrupting the flow of traffic. There's nothing predictable about a car trundling along in the fast lane and then completely letting off the gas. It's not predictable for the driver behind you, and it's not something a driver expects of their own vehicle. Yes, this feature was obviously developed for people driving on the Autobahn, where speeds can drop down from unlimited to a slow crawl pretty quickly when entering a construction zone or approaching a built-up area. German roads also have more consistent signage, so the false-positive scenario I experienced might not have come up there.

Audi replaces Mercedes as official vehicle supplier to the IOC

The automotive sponsor of the International Olympic Committee for the past 22 years has been Daimler-Benz. No more, as Audi has just signed a four-year deal to be the official auto supplier to the folks who keep the torch alight and on the move. Audi will supply vehicles for the IOC's headquarters in Lausanne, Switzerland and the organization's international events.
In case you're remembering all the stories about BMW and the London Olympics last summer and wondering where Mercedes-Benz was in all of that, the answer lies in the numerous mouths at the Olympic trough. The IOC is the organization and oversight body of the Olympics - much like the way the FIA oversees world motorsport. BMW, though, sponsored the London Organizing Committee for the Olympic Games, so during the games IOC reps rode in Benzes, LOCOG and its guest dignitaries rode in BMWs.
The Volkswagen Group has other ties with the Olympics as well: The Group will be the official vehicle partner for the winter Olympics in Sochi, Russia in 2014, and Audi currently partners the national Olympic federations of Germany, Finland, Russia and Switzerland. The press release below announcing the partnership has all the official details.