Volkswagen Ag, the second largest automaker in the world and Europe’s biggest, has recently announced both the end of a two-weeks long leadership crisis and outstanding financial results for the first three months of the year.
First quarter operating profit jumped 17 percent compared to the same period last year, surging past analyst forecasts as the company seems to put its leadership woes caused by the departure of long-running chairman Ferdinand Piech firmly behind it. The group’s financial results were buoyed by the weaker euro and the increases recorded at its luxury units Audi and Porsche, with earnings before interest and taxes surging to 3.3 billion euros ($3.6 billion)- well above the 3.14 billion euro prediction of analysts polled by Bloomberg. Meanwhile, the struggling VW core passenger car brand also managed to lift its earnings margins, while the loss-making Spanish Seat brand returned to positive results.
Earlier this month the former chairman Ferdinand Piech – which has ruled undisputed over the company for more than two decades – made startling comments against chief executive officer Martin Winterkorn and the ensuing leadership issues actually led to Piech’s resignation. Now the twelve brands in the group had an improving operatin margin of 6.3 percent of revenue, with the namesake brand starting to reap the benefits of a cost savings program. The core VW brand managed to improve its margin from 1.8 percent to 2 percent during the first three months of the year, even as it had to withstand the sales slump in Russia and declines in South America.