VW profit revs up as cost cuts materialise
BERLIN: Volkswagen (VW) said profit at its troubled core division soared in the first quarter, a sign that long-overdue cost cuts are materialising as the carmaker pushes a post-dieselgate strategic shift.
First-quarter operating profit at VW’s largest division by sales surged to €869 million (RM4.09 billion) from €73 million a year earlier, said the carmaker, joining rivals Daimler and BMW which have also reported betterthan-expected quarterly results.
Structural changes since the diesel emissions scandal broke in 2015 include streamlining vehicle development, cutting material costs by reducing complexity in parts, dropping unprofitable models and shifting more power to brands and regions to respond more quickly to market needs.
Investors have said a turnaround at VW’s namesake brand, which traditionally has been saddled with high fixed and research and development costs, is key to turn the German behemoth into a more appealing business, although VW last year eclipsed Toyota as the world’s biggest selling carmaker.
“Our efforts to improve efficiency and productivity across all areas of the company are also paying off,” said chief executive Matthias Mueller. Reuters