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Volkswagen Group reports £2.5bn operating loss

financial

Volkswagen Group has reported a €3.48bn (£2.5bn) operating loss for the third quarter of the year, and a €2.52bn (£1.8bn) pre-tax loss, thanks to the mounting cost of the emissions scandal.

In September, the Volkswagen Group admitted installing a piece of software designed to cheat emissions tests in 11 million of its diesel cars worldwide, including Seat, Škoda and Audi models as well as Volkswagen cars.

The company has been forced to set aside €6.7bn (£4.8bn) to cover the costs of the scandal, resulting in the first net loss it has reported in 15 years.

Looking at the figures before taking those costs into account, the Volkswagen Group generated an operating profit of €10.2bn (£7.4bn) in the first nine months of the year. Sales revenue grew by 8.5% to €160.3bn (£116bn).

Matthias Müller, chief executive and chairman of the board of management, said: "The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear. We will do everything in our power to win back the trust we have lost."

Looking at Volkswagen Groups on a brand-by-brand basis, Volkswagen’s operating profit before special items relating to the diesel issue rose to £1.6bn (€2.2bn).

Audi lifted its operating profit to £2.9bn (€4bn) and at Škoda it increased to £530m (€734m). Seat, meanwhile, reported an increase in operating profit to £8m (€12m) and Volkswagen Commercial Vehicles posted an operating profit of £225m (€313m).

Operating profit at Volkswagen Financial Services amounted to £1bn (€1.4bn) on the back of positive volume and exchange rate effects.

The Volkswagen Group expects deliveries to customers in 2015 to remain on a level with the previous year, with sales revenue and its business areas is expected to increase by up to 4%.

However, because of charges related to the irregularities in the software used for certain diesel engines, Volkswagen Group says it expects 2015 operating profit for both the Group and the passenger cars business to be down significantly year-on-year.

“The Volkswagen Group has very solid and robust liquidity resources. This will help us manage the challenging situation caused by the financial impact of the diesel issue”, said chief financial officer Frank Witter.

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