Volkswagen Shows Signs of Sales Growth Post Dieselgate
We know it as Dieselgate.
Volkswagen refers to it as “the diesel issue”.
Whatever the name the scandal has cost the company dearly, with billions in fines and a recall of more than 11 million vehicles worldwide.
In Australia the Competition and Consumer Commission (ACCC) is investigating the company for possible violations of consumer and safety standards, with a voluntary recall of vehicles affected.
In spite of all these challenges the Volkswagen Group has managed to pull off a remarkable comeback, with an increase in profits for the 2016 financial year.
The company reports “very robust performance”, even though its earnings were affected once again by the cost of negative special items – of which 6.4 billion euros can be attributed to the diesel issue.
Sales revenue is up 4.0 billion to 217.3 billion euros for the financial year and the Group’s operating result, which had previously slipped into the red, was back stronger than ever – at 7.1 billion euros.
Before the cost of so-called special items were factored in the Group’s operating result actually reached a new record of 1.6 billion euros – a 14 percent increase.
The operating return on sales is also up by 6.0 percent.
Despite Dieselgate and persistently difficult conditions in markets such as Brazil and Russia, the Group still managed to deliver 10.3 million vehicles worldwide in 2016 financial year.
“While the past fiscal year posed major challenges for us, despite the crisis the Group’s operating business gave its best-ever performance,” CEO Matthias Müller said in Wolfsburg.
“As the figures show, Volkswagen is very solidly positioned in both operational and financial terms. This makes us optimistic about the future.”
He went on, “The Group’s new structure with more decentralised responsibility will strengthen our brands and regions and increase our proximity to customers.
“We will become faster and more focused and efficient. This will enable us to make much more focused use of the strengths of our multi-brand group and its potential for synergies.”
Looking ahead Volkswagen expects the global economy to record slightly higher growth this year, with the strongest rates of expansion in Asia’s emerging economies.
It expects trends in the passenger car markets in individual regions to be mixed in 2017, with global demand for new vehicles probably slower.
Total sales revenue for the Group, Passenger Cars and Commercial Vehicles is expected to grow by up to 4 percent year-on-year.
The Board of Management and Supervisory Board is proposing to pay a dividend of 2.00 euros per ordinary share and 2.06 euros for each preferred share at the Annual General Meeting on May 10.