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VW Group’s Operating Profit Drops
Volkswagen AG's vehicle sales in April-June rose 6% to 2.65 million units.
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Volkswagen AG's vehicle sales in April-June rose 6% to 2.65 million units. But group revenue fell 2% to €51 billion, and operating profit declined 3% to €3.3 billion.
Second-quarter operating profit for the VW brand plunged 37% to €572 million. The drop was partly offset by a 2% improvement to €1.4 billion for the group's Audi luxury car unit and a 75% jump to €425 million for the Skoda budget brand.
The group's net profit for the quarter climbed 13% to €3.2 billion on strong results in China. But the profit margin for the company's VW brand shrank to 2.3%. Earlier this week VW announced a sweeping cost-cutting initiative for the unit.
The company reiterates its goal of maintaining a full-year operating profit margin of 5.5%-6.5% of sales. Its margin was 6.5% in the second quarter and 6.3% for January-June.
The company expects growth in global demand for passenger vehicles to slow slightly in the second half of the year as gains in Europe, China and North America are offset by shrinkage in South America and central and eastern Europe.
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