Volkswagen Group disappointed as its fourth-quarter operating profit declined

Article by Christian A., on February 26, 2012

Volkswagen Group posted a record for its full-year results for 2011 even as its fourth-quarter operating profit declined. According to the preliminary full-year results announced last Friday, its quarterly operating profit fell 0.9% to 2.29 billion euros ($3.05 billion). Analysts predicted a small increase to 2.38 billion over the strength of improvements at the automaker’s core VW and Audi car brands.

VW’s full-year profit for 2011 rose by 58% to 11.3 billion euros – an all-time high for the group. During the previous year, it posted 7.14 billion euros. Its net income for the year had more than doubled to 15.4 billion euros.

Its profit was affected by a gain from the revaluation of Porsche options of the group. In 2011, a record 8.27 million vehicles was delivered by VW. Its brands include Skoda, Seat, Lamborghini and Bentley.

The group seeks to raise its annual sales to 10 million by 2018 at the earliest as it aims to overtake General Motors Co. to be the largest automaker in the world. For the next five years, VW plans to invest a record 62.4 billion euros on plants, models, research and development for its global expansion.

Due to the strong demand in the U.S. and China (its biggest market), VW and Audi have expanded its SUV production. Its pending mergers may lead to future VW growth.

Last year, VW took a majority stake in German truckmaker MAN SE, increasing its holding to 55.9%. VW is hoping to achieve closer links between MAN and Sweden-based Scania AB, which it also controls. VW actually aims to forge a three-way truckmaking alliance. VW said that this tie-up could save up to 1 billion euros in annual costs.

Topics: vw, profit

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