VW profits surge amid drive into emerging markets

Volkswagen, the biggest European carmaker, reported a profits leap on Wednesday, taking the stock market by surprise.

VW profits surge amid drive into emerging markets
Photo: DPA

The group posted a 31-percent gain in first-half net profit on strong sales in emerging markets, pushing its share price above 200 euros for the first time.

“This shows that we are on the right path,” a statement quoted VW chairman Martin Winterkorn as saying.

VW’s net profit jumped to €2.572 billion ($4.0 billion) on a 3.0-percent rise in sales to €56.5 billion. The group stood by its 2008 growth targets for both sales and operating


In the second quarter, VW’s net profit surged to €1.643 billion euros, a gain of 35 percent from the same period a year earlier. Second quarter sales gained 4.5 percent to €29.5 billion euros, with both figures exceeding analysts forecasts.

“Volkswagen’s successful model rollout, leaner processes and disciplined cost management are enabling us to grow profitably,” said financial director Hans Dieter Pötsch.

Most of the company’s brands are to launch new models this year, and a VW statement said the group expected deliveries to surpass records set in 2007.

“The Asia-Pacific, Central and Eastern Europe and South America regions will record the highest growth in demand for group vehicles,” it said.

Volkswagen owns the VW, Audi, Seat, Skoda, Lamborghini, Bugatti auto brands and also Volkswagen Commercial Vehicles. VW also now holds 68.8 percent of the voting rights in the Swedish heavy truck maker Scania, the group said.

Scania would be consolidated into the parent group’s results in the second half and was expected to add a small contribution to overall profits. VW had already announced a new sales record in the first half of the year, at 3.27 million vehicles, owing to strong results in several emerging markets.

It sold more than a half million units in China for the first time, and has weathered problems facing the auto sector in general and rivals like Renault or Toyota in particular.

The operating environment was tougher “and is demanding considerable efforts from the automotive industry,” Winterkorn acknowledged.

VW shares jumped by 3.94 percent to €203.75 in midday trades on the Frankfurt stock exchange while the Dax index of leading shares was 1.08 percent higher overall. It was the first time in VW’s history that its shares traded for more than €200.


Emergency numbers fail in several German states

Callers to the emergency numbers 110 and 112 weren’t able to reach operators Thursday morning in several German states.

The 112 emergency number on an ambulance.
The 112 emergency number on an ambulance. Photo: picture alliance/dpa | Boris Roessler

The emergency number 110 for police and 112 for fire crews failed around the country early Thursday morning, with callers unable to reach emergency operators for urgent assistance between about 4:30 am and 5:40 am local time.

The Office for Civil Protection and Disaster Aid is looking into these outages, which were reported in states including Lower Saxony, Baden-Württemberg, and  Brandenburg, and in major cities like Berlin, Cologne, Hamburg, and Frankfurt. Cologne was further affected by cuts to electricity, drinking water, and regular telephone services. Lower Saxony also saw disruptions to the internal phone networks of police and hospitals.

Emergency services are not reporting any more disturbances and people should be able to once again reach 110 and 112 around the country as normal.

Investigators are looking into the problem, but haven’t yet established a cause or any consequences that may have happened due to the outage. Provider Deutsche Telekom says they have ruled out the possibility of an attack by hackers.