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Volkswagen says its brands improving, led by VW, which turned profit in 1Q

Volkswagen says its brands improving, led by VW, which turned profit in 1Q

Volkswagen AG said Wednesday that its flagship VW brand swung to an operating profit in the first quarter and earnings from its premium Audi brand rose 16 percent as the company broke out unit results for the first time.
It marked a new approach for Europe's biggest automaker and bore the imprint of new Chief Executive Martin Winterkorn's hand in changing how the company is structured.
"The good market acceptance of our attractive models and the sustained benefits of our cost and process optimization programs are reflected in the figures for the individual brands," said Volkswagen Chief Financial Officer Dieter Poetsch. "All group brands improved their operating profit."
VW reported a euro386 million (US$525.2 million) operating profit in the first three months of the year compared with a loss of euro49 million a year ago. The increase came as demand for new models and old favorites _ the CrossGolf, CrossTouran, Polo and others _ increased steadily across Europe, South America and in Asia.
Audi AG saw its operating profit rise 16 percent to euro401 million (US$545.6 million) from euro345 million, led in part by demand for its new A5 series and the launch of the new TT Roadster.
The Czech-based unit Skoda saw its operating profit grow 20 percent to euro172 million (US$234.01 million) from euro143 million a year earlier as the Fabia model lured new buyers into showrooms.
The company's Spanish SEAT brand had an operating loss of euro11 million (US$14.97 million), but that was narrower than the euro32 million loss it posted in 2006.
Wolfsburg-based Volkswagen said last month that it earned euro740 million (US$1 billion) in the January-March period, compared with euro327 million a year earlier. Sales rose 5.1 percent to euro26.6 billion (US$36.19 billion) from euro25.3 billion.
Volkswagen reiterated that its global vehicle sales rose by 7.9 percent in the first quarter to 1.47 million units.
Big gains in China and eastern Europe, and a modest gain in the United States, helped offset a dip in sales in Volkswagen's German home market after the country increased its value-added tax rate in January.
Despite the improvements, the North American market, particularly the U.S., remained a sore sport for the car maker.
Poetsch said the company still hopes to break even in the region by 2009, despite the fact that sales fell 9 percent to euro3.32 billion (US$4.51 billion) there in 2006.
Volkswagen did not give an operating result for the region, but Poetsch said the company was not profitable there without saying how much of a loss it incurred.
Geographically, revenues in VW's key European markets were up 7.5 percent to euro19.32 billion (US$26.25 billion). In South America and South Africa, sales rose 5.5 percent to euro2.29 billion (US$3.11 billion), while in Asia and the Pacific, sales increased 11 percent to euro1.71 billion (US$2.32 billion).
In China, Volkswagen reported an operating profit of euro34 million (US$46.2 million) in the first quarter, more than twice the euro15 million (US$20.38 million) from a year earlier.
Looking ahead, Poetsch said the company expects to "increase worldwide deliveries to customers slightly in 2007" and to exceed 2006's sales tally of euro104.9 billion (US$142.72 billion).
Volkswagen shares rose 0.04 percent to euro111.44 (US$151.42) in Frankfurt.
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Updated : 2020-12-05 04:19 GMT+08:00