Volkswagen Group logged a 22-percent jump in operating profit to EUR2.86 billion ($3.97 billion) in the first quarter of 2014, as profits from its Porsche and Audi brands helped counter slumping earnings at its core VW brand. VW said in a statement that it also posted an almost 3-percent leap in first-quarter revenues to EUR47.8 billion ($66.25 billion).
Volkswagen chief executive Martin Winterkorn said in the statement that the group has established a strong position in recent years, its good start to 1014 is an additional proof of that position. He remarked that the group must continue improving it position and maintain its course.
Recovering demand in Europe buoyed Audi and Porsche to surge by 12 percent and 5 percent to 413,000 and 38,700 units, respectively. For the quarter, all of VW’s car brands logged profits, save for Seat. VW brand posted a decline in first-quarter operating profit to EUR440 million ($609.9 million) from EUR590 million in the same period in 2013.
Its profits took a hit from lower sales volumes, unfavorable exchange rates in South America and Russia, and higher upfront investments in new technologies.
Audi, meanwhile, posted a 2014 first-quarter operating profit similar to the period in 2013, at EUR1.3 billion ($1.8 billion), as higher sales was offset by high upfront investments in new products and technologies and in the expansion of Audi's production network outside Germany.
Porsche, on the other hand, saw its operating profit in the quarter surge from EUR573 million to 698 million ($967.4 million) while Bentley also managed to hike its operating profit to EUR45 million ($62.4 million) from 27 million. Seat posted another loss in the quarter at EUR36 million ($49.9 million), it was lower than the EUR46 million posted a year ago.
Skoda logged a 65-percent boost in profit in the quarter to EUR185 million ($256.4 million), thanks to new models and higher vehicle sales. VW reiterated its cautious outlook disclosed in February, although its core European markets have surged for seven consecutive months. [source: Volkswagen]