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Volkswagen profit jumps as it warns of a cooling auto market

FRANKFURT, Germany — Volkswagen says its profits jumped 44% in the third quarter thanks to a more profitable mix of vehicles in its lineup but warned that global car markets are slowing more than expected and lowered its forecast for annual sales. After-tax profit rose to $4.42 billion (3.98 billion euros) as revenues rose 11% to $68.27 billion (61.42 billion euros). The sales margin of 7.8% exceeded the goal of 6.5-7.5% as vehicles bringing higher profits took a larger share of sales. The Wolfsburg-based automaker pointed to the headwinds facing the industry by saying that it expects "vehicle markets will contract faster than previously anticipated in many regions of the world." It said sales would be "on a level" with last year's record of 10.8 million vehicles. Previously it had expected a slight increase. The company said its profits would be in the lower end of its forecast range. Global automakers are facing a slowdown in sales amid disputes over trade and from pressure in the European Union and China to develop and sell low-emission vehicles that require heavy investment in new technology. Ford and Renault have issued profit warnings in recent days, while Daimler, maker of Mercedes-Benz luxury cars, lost money in the second quarter and is expected to outline a cost-cutting strategy for investors on Nov. 14. Volkswagen is leading the push into electric vehicles in Europe by launching its ID.3 battery-powered compact car at prices it says will make zero local emission vehicles a mass phenomenon. The company was able to increase earnings in the quarter despite an 18% rise in spending on research and development.

German authorities claim 2.8 million VW diesels evaded testing

While Volkswagen admits that there are 11 million diesel vehicles around the world that may be able to evade emissions testing, investigations by government authorities are starting to provide a glimpse of where some of those actually are. According to German Transport Minister Alexander Dobrindt, there are 2.8 million VWs in the country with the tech to cheat environmental rules, Reuters reports. In the US, at least 482,000 cars are believed to be affected. German regulators claim not knowing about the automaker's emissions testing evasions until quite recently, and Dobrindt didn't begin a fact-finding mission into the situation until just this week. Environmental agencies around the world have also begun their own inquiries into the scandal, including in Canada, South Korea, and many countries in Europe. In the US, where the story originally broke, the Department of Justice has started a criminal investigation into VW, and a maximum fine from the Environmental Protection Agency could tally $18 billion. The automaker has responded so far by setting aside about $7.3 billion to fix the affected models. CEO Martin Winterkorn is also already gone, and Porsche boss Matthias Muller is taking the top spot. The company's next moves still aren't clear, though. "VW needs to be very open about what has happened, how it was possible that this could happen to make sure that this never happens again in the future," an anonymous, top shareholder in the company said to Reuters.

Crash test videos show how rust compromises safety

These recently released Swedish videos serve as a reminder that rust isn't just a cosmetic flaw, when it comes to cars. The insurance company Folksam and the homeowner organization Villaagarnas Riksforbund gathered examples of two relatively popular, but by now rusty cars, and then performed crash tests with them at the Thatcham Research facility in Britain. The results are sobering. The rustier cars chosen for the tests were first-generation Mazda6s, cars that have a reputation for early-onset rust in salty surroundings, such as the Nordic countries in Europe or the Salt Belt in the U.S. The cars in the other end of the spectrum were fifth-generation Volkswagen Golfs, which thanks to their body treatment only really start to show rust at over ten years old. But rust isn't just on the surface, it goes bone deep. While the Mazda did decently well in Euro NCAP testing as a new car, there's now a 20 percent higher risk of death in the 2003-2008 Mazda due to the degradation of its bodyshell. In the rusty car, the chassis rail separates from the floor, the footwell ruptures, the sill gives way, the seat mountings move and the dummy's head hits the B-pillar; all important failures, despite Thatcham saying the cars actually performed better in the crashes than they expected with all the rust. But still, the corroded structure isn't able to transmit loads in the way it was originally designed to do. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. The Golf does significantly better — despite rust flakes flying when the Golf hits the wall — as the years have only caused it to lose a single point. An important thing to remember is that the cars aren't tested in comparison to corresponding new, 2018 cars: the tests are in reference to the crashworthiness standards in place when they were new. The cars' airbags inflate like they were supposed to, but on the Mazda the dummy's head bottoms out the airbag due to the car's structure failing, meaning the airbag cannot perform as designed. Driven cautiously, an older car is still mostly fine for driving around. But tests like these remind us that it's not enough that a car runs and drives, if the body has turned into Swedish knackebrod. And if you repair the visible rust and the structure underneath remains as compromised as ever, there's an ugly truth under all the bondo. Perhaps it isn't such a bad idea to have yearly roadworthiness inspections.