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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

Bugatti has already designed and shown an SUV, awaits green light

Bugatti appears to be backing itself right into the quilted leather seats of a crossover the brand swore would never happen. In January, CEO Stephan Winkelmann announced to the world, "There will be no SUV from Bugatti." By April, reports said Bugatti was working on a "crossover-influenced sports car," which is gobbledygook meant to avoid calling an SUV an SUV. Winkelmann also admitted then that as far as what kind of vehicle to build as a second Bugatti, "It's not me to decide." At the beginning of this month, Automobile magazine's intel claimed Bugatti was considering an all-electric SUV using a Rimac platform, limited to around 600 units per year and selling for between $850,000 and $1 million. Closing the circle, when Automobile's man recently sat down with Winkelmann, the CEO said this in response to a question about a "three-door, ultra-premium crossover SUV:" "The design is done. Some potential customers have seen it, and they liked it." The Italo-German head honcho then seemed to back Automobile's previous reportage, saying that a potential crossover "would almost certainly be battery-powered," and that he envisioned sales volumes between 600 and 800 per year. When "one or two influential people" from the Volkswagen Group mother ship stopped by to check out the design, they "were complimentary about it." Since overlords haven't signed off on any such vehicle, "there is no budget and no decision." But this is like when a dog owner puts on his jacket, shorts, and gym shoes, grabs the leash, then tortures the dog with the pretense that they aren't going for a walk. So don't be surprised if [when] Bugatti reveals a crossover. One truly surprising quote from the boss was when he said, "So far, nobody is doing a high-performance, high-end luxury CUV. Because of the battery situation, it’s too early for an electric hypercar." To the former claim, that's a wheelbarrow full of dirt thrown on the Bentley Bentayga Speed, as well as the Lamborghini Urus that Winkelmann shepherded to production. As for the latter, Rimac and Pininfarina would likely, respectfully, disagree.  Another potential walk-back is an open-topped version of the Chiron. When Motor Trend asked Winkelmann last December if the carmaker planned a Chiron Grand Sport, the exec replied, "We decided in the Chiron project not to do an open-top version." And now?

Hand-made, magnesium-bodied 1934 Bugatti Aerolithe visits Jay Leno's Garage

Rare, multi-million-dollar cars regularly cruise through Jay Leno's garage, but some of the vehicles that pay him visits are more special than others. The 1934 Bugatti Aerolithe that Leno recently dedicated an episode to is the kind of machine that punctures the membrane separating cars and art. The Aerolithe was designed by Jean Bugatti, the son of company founder Ettore, and its body was crafted entirely out of a magnesium alloy named Elektron in an effort to keep weight in check. As Leno points out, Elektron is spectacularly difficult to work with because it's hard to shape, and it has an alarming tendency to catch fire. That's why more than 1,200 exposed rivets helped keep the Aerolithe in one piece as it toured Europe in search of buyers. Period records indicate potential owners admired the performance delivered by the 3.3-liter straight-eight engine - the Aerolithe could reach nearly 110 mph - but not enough to buy one. While it remained a one-off model, it inspired Bugatti to make the cheaper, heavier Type 57 Atlantic with an aluminum body. The two cars looked a lot alike. The Aerolithe mysteriously disappeared before the beginning of World War II. Some sources believe it was parted out at the Bugatti factory in Molsheim, France, while others claim it was hidden and never taken out of storage. Regardless, its whereabouts remain unknown as of 2019. The example Leno tours Los Angeles in is a reproduction painstakingly made from the ground up by the Guild of Automotive Restorers in Canada. David Grainer, the Guild's founder, remembers the members of his team spent nearly a year figuring out how to recreate the Aerolithe before they started the project. They wanted to keep it as original as possible, so they used sheets of magnesium purchased for $3,000 a piece to make the body. Building a car from scratch (and by hand) is a challenging endeavor, but the Aerolithe project was even more complicated that it sounds because Grainer's team had only nine usable photographs to work with. Blueprints were lost long ago. Watch the full episode to learn more about the Aerolithe's history, and to find out what it's like to drive. For a look at a different side of Bugatti during the 1930s, read our story documenting the electric Type 56 that Ettore made in 1931 to drive around his property. Auto News Bugatti Classics