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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

Bentley to cut 1,000 jobs in Britain

Luxury carmaker Bentley is cutting about 1,000 jobs in the United Kingdom amid the ongoing coronavirus outbreak, the BBC reported late on Thursday. The cuts at the Volkswagen-owned brand are expected to be announced on Friday, according to the report. The carmaker is likely to offer workers the chance to take voluntary redundancy, the report added. Bentley, founded in the UK in 1919, has restarted production at its northern English Crewe factory, where it builds thousands of luxury models. However, the shutdown of its UK production due to the virus outbreak has hurt the company. Earlier on Thursday, Aston Martin, another luxury carmaker, said it planned to shed 500 jobs as it seeks to bring its cost base into line with reduced sports car production levels. Volkswagen and Bentley did not immediately respond to a Reuters request for comment late on Thursday. Related Video:    

First new Bentley Blower built since 1930 is now being tested

Just over a year after announcing the program, Bentley has finished building its first Blower car since 1930. It's called "Car Zero" since it's not one of the 12 customer cars. Instead, this first car is a prototype that will undergo testing before the customer cars begin production. Bentley says this car took 40,000 hours to complete. The company figured out how to build it based on existing tooling and blueprints, as well as laser scans of the components in the company's 1929 race car on which the continuation models will be based. The company collaborated with a variety of outside companies for help with the frame, radiator shroud and leaf springs. The frame was built by a company that builds and restores boilers for steam engines. Bentley itself also built a custom stand so it could hook up the recreated 4.5-liter supercharged four-cylinder to its modern-day engine dynamometers for break-in. Now that this prototype has been completed, Bentley will begin testing it for durability. The planned testing should recreate just under 22,000 miles of regular driving and nearly 5,000 miles of track driving. The company will also do a top speed run with it. Once testing is complete, Bentley will start building the 12 customer cars, all of which have been sold and specified. While many are likely excited about this new Bentley, there are a handful of car enthusiasts that probably don't share the excitement. Earlier this year, several of these wealthy enthusiasts, including fashion mogul Ralph Lauren, sent a letter to Bentley expressing concerns that these continuation cars will reduce the value, both monetary and intrinsic, of the original cars. The complaint obviously hasn't had an effect on Bentley's plans. Related Video: