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Business News for Tuesday January 6, 2009
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Volkswagen drives profit up 25 percent
Wednesday April 23, 2008
Volkswagen said Wednesday that improved sales helped lift its first-quarter net profit by more than 25 percent and predicted a substantial increase in demand from Asia, Europe and South America. The Wolfsburg-based company, Europe's biggest car maker by sales, said it earned $1.5 billion in the January-March period, compared with around $1.1 billion the year before. Operating profit rose 21 percent to $2 billion from $1.58 billion a year earlier.
Sales rose 1.4 percent to $43.01 billion. The number of cars sold rose by 6.9 percent worldwide to 1.6 million from 1.5 million. Details of sales by brand -- including VW, Audi, Lamborghini, Bentley, Bugatti, Seat and Skoda -- are expected on April 30. On Monday, Volkswagen said it expected its April sales to be up seven percent on last year, with approximately 550,000 cars sold. The company said plans to offer several new models this year would push up sales. "For this reason, we are assuming that deliveries to Volkswagen Group customers in 2008 will exceed the record levels achieved in the previous year," the company said in a statement. "We expect demand for ... vehicles to increase substantially, especially in the Asia-Pacific, Central and Eastern Europe, and South America regions." Shares of Volkswagen were down 2.3 percent to $297.69. The earnings report came a day before Volkswagen's annual general meeting, which is expected to be contentious in view of a disagreement between the company's two biggest shareholders over future rules on decision-making. Automaker Porsche, Volkswagen's biggest shareholder, has declared its intention to lift its current stake of 31 percent to a majority stake. However, the second-biggest shareholder, Volkswagen's home state of Lower Saxony, is wary of losing the blocking minority that it enjoys through its holding of just over 20 percent. It wants to keep a rule under which "significant decisions" require the approval of shareholders representing 80 percent of Volkswagen's stock, plus one share.
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