German auto giant Volkswagen said on Thursday that its profit, after-tax reduction, rose to 24 per cent in the second quarter (April-June) as the company managed to increase its share in contracting markets, boosted by a rise in demand for sports utility vehicles (SUV) and premium brand vehicles. Net profit for the Wolfsburg based company rose to 4.11 billion euros ($4.58 billion) from 3.31 billion euros in the year-ago period. While the number of vehicles sold fell slightly, sales revenue rose 6.6 per cent to 65.18 billion euros during the same period.
For the first six months of the year, the sales revenue of the Volkswagen Group grew by 4.9 per cent to 125.2 billion euros compared to the first half of 2018. “In the first half of the year, the Volkswagen Group performed very well in a generally weaker overall market. The development of sales revenue and profit in the first six months is gratifying. We also confirm our outlook for the Volkswagen Group for the year as a whole,” said Frank Witter, member of the board of management responsible for finance.
The German carmaker also said that the earnings of its Chinese joint venture companies, included among equity-accounted investments, fell only slightly in a shrinking market. Meanwhile, the sales revenue of the Volkswagen passenger cars brand in the first six months of 2019 increased by 3.4 per cent year-on-year to 44.1 billion euros, while for the Audi brand, the recent allocation of multi-brand sales companies contributed to a decline in sales revenue to 28.8 euros billion. Other brands like Skoda, Porsche Automotive and Bentley also saw a rise in revenues.
It continues to expect that deliveries to Volkswagen customers in 2019 will be slightly higher than in 2018 despite market conditions remain challenging, the group said. It also expects its passenger cars and commercial vehicles business to grow at 5 per cent this year compared to the last year. “The main challenges relate to the uncertain economic environment, the growing intensity of competition, volatile exchange rate trends and the more stringent registration requirements,” Volkswagen said.