Volkswagen Q3 Profit Advances, Europe slows image

Volkswagen Ag, on Thursday said its operating profit rose to €9.0 billion, up from €7.1 billion in fiscal 2010.

The company has earned more in the first nine months of 2011 than in the whole of 2010.

Operating profit jumped 45.7 percent to 2.891 billion euros on a 25.3-percent increase in revenues to 38.5 billion euros and a 13.7-percent rise in unit sales to 2.041 million vehicles, the carmaker said.

Profit beat the 2.61 billion-euro average estimate of 15 analysts surveyed by Bloomberg.

The auto giant said its global market share climbed to 12.4 percent, the operating return on sales improved to 7.7 percent (5.2 percent), while the profit before tax tripled to €16.6 billion (€5.4 billion).

“Our strong business performance shows the strength and stability of our strategy”, said CEO Martin Winterkorn.

With economic prospects in Europe looking subdued, the car-maker expects most of its demand to come from Central and Eastern Europe, as well as China and India.

“The positive trends in the key markets of China and India will also continue, Overall, the global auto market is set to grow this year compared to 2010.” Winterkorn said.

However, Europe’s future look bad. French automaker PSA Peugeot Citroen says it plans to slash thousands of jobs in Europe as part of an 800 million euros ($A1.07 billion) cost-cutting plan amid a stagnating European car market.

Daimler also posted a 16 percent net fall to €1.29 billion ($1.79 billion) from €1.53 billion last year, while revenue rose 5% to €26.4 billion, driven by higher vehicle sales.

But for Volkswagen, at least for the moment, the future looks bright. If sales continue to grow steadily in emerging markets, VW will overtake Toyota as the world’s biggest volume producer of automobiles.

By the end of the year, VW will have sold 7.8 million vehicles and have a 10.5 percent market share, analyst JD Power told the Financial Times Another renowned consultancy, IHS Automotive Consulting, projects Volkswagen to sell 7.76 million units of cars, followed by GM with 7.36 million units.