Cheating on the diesel emissions tests triggered a profit plunge at Volkswagen’s namesake brand for the first quarter.
Nine months have been passed since Volkswagen admitted it rigged emissions tests on 11 million diesels around the world. And the financial repercussions have been in accordance with the automaker’s actions. The German auto group posted a record loss last year, after setting aside 16.2 billion euros to cover the costs of the scandal. On Tuesday, VW said the operating profit of its main marque crushed to 73 million euros (81 million dollars) in the first quarter from 514 million euros last year, with an operating margin of 0.3 percent, way behind of the 6 percent mid-term goal.
As for automaker’s other brands, Audi reported a slight 100 million euro drop in operating profit to 1.3 billion euros, Skoda made a strong 30 percent jump to 315 million euros, with a corresponding growth in its operating margin, from 1.5 to 2.6 percent, while Seat is also on a profitable path. Porsche managed to stay on a successful trajectory, with an operating profit of 895 million euros, up from 765, and with an industry-record margin of 16.6 percent.
Therefore, offsetting the weak results of the core brand, operating profit for the entire group increased to 3.44 billion euros from 3.33 billion euros. That result included 309 million euros in positive special items, including currency-related adjustments to the provisions in connection with the diesel issue. For 2016 as a whole, VW reiterated guidance issued in April for the group’s operating margin to come to between 5 and 6 percent, versus 6 percent last year, adjusted for special items.