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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

Malaise Era All-Stars

A few weeks ago, we bid a fond happy 40th anniversary to the automotive dark ages of 1973-84 that have come to be known as "The Malaise Era" - the performance ice-age when 160 horsepower was a lot and a 0-60 time of under 10 seconds was remarkable. Like music in the 1980s, everything in automobiledom didn't suck, however. There were a few bright spots. Here are five of our favorites:
1976-79 Porsche 930, aka 911 Turbo Carrera (above)
Photo Credit: Dorotheum

Coming to America | 2018 Audi RS3 Sedan First Drive

Audi's Quattro division never let us have the giant-killing, all-wheel-drive RS3. Too sophisticated for the US, they said. Too European. And we only make it as a Sportback (that's hatchback to you). You wouldn't like it. You're more SUV kind of people. Others, those in Quattro's special we-like-you countries, bought the RS3 and constantly raved about it, insisting its handling made the Mercedes-AMG A45 look ponderous (because, well, it is), its packaging was terrific, and the noise, they said. The noise. Over and over, the noise. But ex-Lamborghini president Stephan Winkelmann is now the boss and he's brought with him a worldview that Quattro GmbH never had. And despite being busy changing the letterhead to Audi Sport, Winkelmann found time to think about America. And he must like us because he's moved us to the top of the list. Not only will we get the face-lifted RS3, with its new, lightweight five-cylinder turbo motor crunching out 332 pound-feet of torque and 400 horsepower, we'll get it in a crisply styled three-box sedan. And we'll get it first, before even Germany (where it's built). The RS3's 2.5-liter five-cylinder has enough power to hurl it to 62 mph in 4.1 seconds and, thanks to launch control, the ability to do so repeatably. It's coming with a 155-mph top speed that can be raised to 174. It's coming with limpet grip from a rear-biased all-wheel-drive system. It's coming with a seven-speed dual-clutch transmission (and don't ask for a stick shift, because they haven't bothered to engineer one). It's coming standard (for the US) with constantly variable magnetic ride dampers, which replace the base fixed-rate steel spring-and-damper setup. But more than anything else, the RS3 sedan is coming here with that engine. It starts with a sharp braaap as it spins to around 4000 rpm and then a pop and bang that will wake the neighbors. And that's in the quieter default mode. It's like an angry man who always wakes up looking for a fight and, finding he can't get one, barks out the last word anyway. Except it never really goes quiet. It goes less loud, but not quiet. Quiet is not in the repertoire. The engine is what dominates this car and the noise dominates the engine. It's always there, always threatening, menacing, bellowing, barking, or popping and burbling. With a 1-2-4-5-3 firing order, the turbo five is a unique combination of belligerent and sophisticated, raucous and operatic, brutal and smooth, and often all of them at the same time.