VW’s Profits fell by 19%
Volkswagen continues to pay the price for its emissions-test cheating scandal revealed in September 2015. The first quarter of 2016 resulted in a 19% slump in profits for the German car-maker year on year and pre-scandal. Since the discovery that VW had been fitting their cars with defeat devices in order to pass European and US emissions regulations, the company has seen a significant downturn in their pre-tax profits.
VW’s First Quarter Results
Just days after the scandal emerged in the September, chief executive Martin Winterkorn resigned. He was replaced by Matthias Mueller, who officially spok about the first quarter results on behalf of the VW Group. “We once again managed to limit the economic effects of the diesel issue and achieved respectable results under difficult conditions.”
Mueller refers to difficult conditions, and these are expected to be expensive for the car giant. Recalls and fixes to the 11 million Volkswagen cars fitted with engine control software designed to evade emissions tests worldwide will be costly. The company has already earmarked £16 billion to cover costs and repairs to rectify the situation.
If you were on of the people waiting for your VW car to be recalled and fixed, perhaps while you waited you could of got a Car Leasing Gloucestershire company to help you out with a vehicle to get from A to B. You could of looked on sites including mphvehiclesolutions.co.uk to get an idea of what cars you could have until your new car arrives. Make sure you have a car that does not cheat the emissions test. With the VW Group also owning the German brand Audi, the Czech brand Skoda and the Spanish brand Seat, not to mention the luxury car brand Porsche, VW-branded cars are not the only ones affected by the emissions scandal.
Despite the downturn in pre-tax profits that quarter, Volkswagen unit sales continued to rise and are up 0.8% in the first quarter. This could suggest that global customers may care less about the emissions test scandal than the media and investors do.
Considering the negative headlines VW has received, the company has started this year surprisingly positively with an operating profit ahead of last year’s and significantly beyond analyst expectations. Ironically, it would appear that VW is on track to become the biggest vehicle maker in the world this year, particularly as General Motors and Toyota have both seen sales decline so far.