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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

Gliding on the ice at Bentley's fantasy camp

It was just before 2:00 PM when I landed in Helsinki, bleary-eyed and more than slightly disoriented, after a late-night departure from New York and an early-morning connection in Amsterdam. I was staring at the departures board. There was one more flight to go before I could join Bentley for Power on Ice, its annual ice driving experience in the northerly town of Kuusamo, but there was a problem: There were two HEL-KAO flights on the board, both slated to leave at 4:30, and it was impossible to discern which was Bentley's chartered flight to the alpine ski area. Nonplussed and unable to utter a word in Finnish, I approached a gate agent with rudimentary English to see if she knew which flight was mine. "I'm sorry, sir," she said in an Finnish take on the Omaha dialect, "Your plane does not seem to exist." I winced. Of course it didn't. "My" plane was way out on the tarmac, far away from proletariat jumbo jets, accessible only through a gate that the automaker had staffed and commandeered for the afternoon. It was an auspicious start to three days of attending Bentley's exclusive fantasy camp for its affluent super-fans, which purportedly exists to answer the question: What can you give the Bentley fan who already has everything? For drivers more accustomed to making graceful entries and exits in their posh vehicles, several days of power sliding on a private track more than suffices. You need not be a Bentley owner to participate in the program, but an aficionado of the brand with some cash burning a pretty big hole in the pocket. For the better part of a decade, Bentley has decamped to Kuusamo, the town located just south of the Arctic Circle, to prove the British performance bona-fides of its lineup on 19 square miles of frozen Kuusamojarvi lake, as part of the wintertime Power on Ice event. The program satisfies the need of high-end performance enthusiasts who want something different than arriving at another five-star hotel for another weekend of good eating, drinking, and relaxing. Plenty of brands assert that they have a bespoke answer for discerning customers, but Power on Ice is truly different. You need not be a Bentley owner to participate in the program, but an aficionado of the brand with some cash burning a pretty big hole in the pocket.

Weekly Recap: Mercedes continues the pseudo-coupe craze with AMG-tuned CUV

But as BMW's X6 has demonstrated, sport sells in in the crossover segment, and Mercedes is giving the people what they want. BMW proved there is a market for crossover utility vehicles designed to look like coupes – as much as a vehicle with four doors and noticeable ground clearance can look like a coupe, anyway. Now comes the reply from Mercedes-Benz: the GLE Coupe. The rakish crossover is a harbinger of things to come from Mercedes, as it begins the company's transition to a new nomenclature and marks the debut of the AMG Sport line. It also continues the recent coupe craze. Designers from many automakers, like Nissan and Volkswagen, have increasingly turned to swoopy, dramatic styling to make utility vehicles and sedans seem more desirable. By revealing the GLE 450 AMG Sport model first, Mercedes is clearly hoping to cast the GLE Coupe as a sportier, lifestyle-oriented alternative in its lineup of beefy crossovers and SUVs. Mercedes used the word "sport," or a variation of it, 53 times in its press release, so uh yeah, it's sporty. It's not an empty promise: Benz means business with the AMG Sport line. This GLE Coupe gets a 3.0-liter biturbo V6 rated at 362 horsepower and 384 pound-feet of torque paired with Mercedes' new nine-speed automatic transmission, and it runs with 4Matic all-wheel drive. Specs on the other GLE Coupe models were not disclosed. But as BMW's X6 has demonstrated, sport sells in in the crossover segment, and Mercedes is giving the people what they want. After all, more than 260,000 people have bought X6s since 2008, and Mercedes wants a piece of that. From certain angles, the GLE Coupe even looks vaguely like an X6. "This is really a vehicle that is all about status," said Dave Sullivan, product analysis manager for research firm AutoPacific. "You can buy a SUV that doesn't have the inherent qualities of a SUV, such as cargo hauling. People will likely be drawn to the looks. Coupes are all the rage." BMW, however, isn't running from the fight, and the updated 2015 X6 is arriving in showrooms this month. It also added a smaller sibling, the X4, to its coupe-crossover stable in July. The GLE Coupe arrives next year, though Mercedes hasn't specified exactly when it will hit showrooms from the factory in Alabama, or specified details on the rest of the non-AMG Sport models. In 2008, it was surprising the X6 was a hit. In 2015, it will be even more surprising if the GLE Coupe isn't.