Riding relief

Despite Dieselgate, another record year for VW

main 0201093576 source Marijan Murat DPA – VW Volkswagen CEO Matthias Mueller Muller Sedric concept car auto Oct 2017 Handelsblatt Auto-Gipfel summit
All good in the hood. Source: DPA

The record numbers of people buying VW cars seems to show that VW’s customers, including buyers of Audis, Porsches or any of the other nine brands, don’t give a fig about emissions fraud.

The world’s largest carmaker again broke records, raising annual revenue to €230.7 billion last year, and sold more vehicles than ever: just under 10.78 million. Operating profit excluding Dieselgate charges rose 16.5 percent to €17 billion. Ongoing investigations, lawsuits, recalls and bad press about emissions tests with humans and monkeys didn’t seem to matter.

Charges for its emissions fraud, revealed by US regulators in September 2015 and affecting 11 million cars, halved to €3.2 billion last year. Higher buy-back costs and retrofits for diesel cars in North America were the main component of the charges. Its net cash flow in its automotive business, which excludes financial services, turned negative to the tune of €6 billion, whereas a year earlier there was a positive figure of €10.3 billion. The “diesel issue,” as the automaker called it, will still pose a challenge this year.

In a sign of confidence, however, the Wolfsburg-based group almost doubled the dividend on its blue-chip listed shares to €3.96, predicted that revenue might rise as much as 5 percent in 2018 and expected a moderate increase of vehicle deliveries to customers. The outlook did disappoint shareholders, who briefly sent VW’s preference shares down as much as 2.4 percent. The loss shrank to -0.4 percent by 4:55 p.m. in Frankfurt.

Volkswagen had already said last month that vehicle sales grew in almost all of its markets, with the high expansion rates recorded in the US, Brazil, Russia and Central and Eastern Europe.

Gilbert Kreijger is an editor with Handelsblatt Global, covering companies and markets. To contact the author: kreijger@handelsblattgroup.com

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