Volkswagen is Europe’s largest auto maker by sales as reported in late October 2018. Tougher emissions regulations have been enforced in Europe, yet the company still made headway in the fiscal year. The company reaffirmed its profit and sales outlook for the year, driving company shares 5% higher in early trading. Volkswagen said net profit rose to 2.67 billion from 990 million in the same period a year ago.
The trade dispute between China and the United States has dampened business and consumer confidence, and brought a significant market decline in the third quarter, according to Volkswagen’s finance chief. He stated that sales were also hit by the new emissions testing standard in Europe.
The company still managed to increase sales in China during the first 9 months of the year, partially due to a rise in auto financing and lower taxes on purchases. Overall, Volkswagen sales for 4.1% world-wide to 7.6 million vehicles. The Volkswagen brand, the company’s largest business by revenue and sales, increased revenue in the first nine months of the year, but pretax earnings fell 7% to 2.3 billion.
Audi, Volkswagen’s luxury brand and one of its main profit drivers, also posted a 7% decline in pretax earnings to 3.6 billion. Profit at Porsche, Volkswagen’s sports car brand, rose nearly 11% to 3.2 billion, while Bentley, the super luxury brand, continued to decrease, reporting a 137 million loss in the first nine months of the year.
Volkswagen confirmed its 2018 guidance, forecasting sales to rise as much as 5% and operating return on sales between 6.5% and 7.5%.