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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

2015 Volkswagen GTI: Introduction [w/video]

If you've ever met me, listened to me on the podcast, or come to know me through my writing during the last five years at Autoblog, the following phrase should not surprise you: I freaking love the Volkswagen GTI. I've long said that the GTI is the perfect daily driver for the everyday enthusiast – a car that offers as much practicality as it does performance, served up in a semi-premium, attractive package. I've preached the GTI's story to anyone who would listen, and I've managed to convince several people to actually go out and buy one (those folks later telling me they're super happy with their cars, by the way). As for this new, seventh-generation GTI, I'll offer a little backstory. In 2013, Volkswagen flew me to Germany to attend the Frankfurt Motor Show, where I also got to drive a number of the company's products, including the CrossBlue crossover concept. While waiting for my turn to pilot the CrossBlue in an airport hangar, one of the German PR folks directed my attention to a white, four-door GTI sitting outside, and said I was free to have my way with it for, oh, 20 minutes... on an empty runway... in the rain. This was my first experience with the new GTI, in a fairly loaded spec, with all the performance goodies. Needless to say, I loved it. But my other big belief about the GTI is that this car is truly perfect in its base form. The sixth-generation car was a blast without any dynamic controls or performance whats-its, and while those things certainly help make this new hot Golf a more enthusiastic package than ever, in my eyes, they aren't completely necessary. That's why, when it came time to order a long-term car, I took control of the options. The end result is the carbon steel gray GTI you see here, in four-door S (base) spec, with a six-speed manual transmission. Yes, I did outfit our car with the only two options available to S shoppers (aside from the $1,495 performance pack) – the $995 lighting package and $695 driver assistance pack – but other than that, it's a no-nonsense hot hatch. No sunroof. No leather. No fully power-adjustable seats. No navigation. No dual-zone climate control. No automatic headlights. No upgraded audio. The bottom line is that our long-term GTI comes in with an as-tested price of $27,895, including the $820 destination charge. That's right: a $28,000 GTI. What our car does have is everything you'd want in a GTI.

VW Group to split brands under four holding companies

The Volkswagen Group is planning a tremendous shift in its internal structure that will decentralize operations by splitting its 12 brands into four different holding companies. Here's the breakdown. Things will be split logically, considering the inter-sharing of parts, platforms, and engines. The Volkswagen brand, Seat, and Skoda make up a passenger vehicle division led by former BMW man Herbert Diess. Audi, which is tightly intertwined with Lamborghini and motorcycle manufacturer Ducati, will be managed by current Audi exec Rupert Stadler. Porsche and Bentley, which are already quite close, will be joined by Bugatti and run by Matthias Mueller. Finally, a commercial vehicles division will include Volkswagen Commercial, Scania, and Man. Former Daimler exec Andreas Renschler will take care of the big vehicles. The massive move, according to Automotive News Europe, is part of an internal VAG effort to move away from the structure established by ousted Chairman Ferdinand Piech, who favored a compact, but highly centralized, management structure to oversee the independent actions of the company's brands. Criticism of Piech's arrangement stemmed from the company's slow responses to changes in the market, ANE reports. The new structure should make for a more efficient, streamlined company that's better able to make crucial decisions. What are your thoughts? Should VAG decentralize, or did Piech have the right idea? Have your say in Comments.