Volkswagen Q2 net income quadruples
Published 29/07/2010 | 11:30
Volkswagen reported the biggest quarterly profit in 2 years on higher demand in China and the US for the Golf compact and Audi A5 coupe.
Second-quarter net income quadrupled to €1.25bn from €283m a year earlier, the company said today in a statement.
Profit beat the €721m median estimate of nine analysts surveyed by Bloomberg News. Revenue rose 22pc to €33.2bn.
Chief Executive Officer Martin Winterkorn, aiming to surpass Toyota in sales and profitability by 2018, is targeting a second straight year of record deliveries.
In China alone, Volkswagen announced plans in the last two months to build two new plants to double production capacity.
“VW has a sound model mix and a solid footing in the growth regions of the world, that’s why they had a strong quarter,” Daniel Schwarz, a Frankfurt-based analyst at Commerzbank AG who recommends buying the stock, said before the release.
“VW’s volume brands are selling well while Audi is benefiting from the reviving luxury market.”
VW said on June 16 that deliveries, which rose 16pc in the first half, may “significantly” exceed last year’s 6.29 million vehicles.
Volkswagen’s two new factories will bring the carmaker’s total in its biggest market to 11 as VW doubles production in China to 3 million vehicles within four years from 1.4 million in 2009.
VW’s first-half deliveries in the world’s largest auto market climbed 46pc to 950,278 vehicles.
In the US, where Volkswagen will open a plant in Chattanooga, Tennessee next year, six-month sales increased 29pc to 175,300.
First-half US sales of the Jetta compact, which VW will swap for a new version in October, increased 19pc to 55,258 cars, accounting for 44pc of the total.
Other models that posted gains included the Tiguan, Passat CC and Rabbit.
VW is targeting in 2018 a pretax profit that exceeds 8pc of sales, compared with 1.4pc in the first three quarters of 2009, as well as a medium-term operating margin of at least 5pc of revenue, VW said on April 29, reiterating goals first published earlier.
Volkswagen is integrating Porsche SE’s auto-making division as the two manufacturers develop a model strategy that includes sharing platforms to double Porsche’s deliveries to 150 vehicles in the medium term.
Winterkorn this month named production chief Jochem Heizmann to a new post overseeing VW’s truck holding as the carmaker seeks to forge closer ties between truckmakers Scania AB and MAN SE.
Volkswagen owns 70.9pc of Scania’s voting rights and 29.9pc of MAN, which today reported a nearly sevenfold increase in second-quarter net income to €153m as demand for heavy trucks in Europe rebounds.