Volkswagen on track one year after ‘Dieselgate’ blow

BERLIN: German auto giant Volkswagen (VW) posted net profit of € 2.28 billion (RM10.4 billion) for the third quarter and raised its full-year forecasts, turning the tide from a massive loss a year ago over its emissions cheating scandal also known as Dieselgate.

The group’s profit for the three months ending September fell slightly short of the € 2.45 billion forecast by analysts, but was a sharp improvement from the € 1.73 billion net loss posted for the same period last year.

The car maker, once a paragon of German industry, has been plunged into its deepest-ever crisis after it emerged in September last year that it installed emissions-cheating software in 11 million diesel engines worldwide.

The device allowed some vehicles to spew out almost 40 times the permissible levels of harmful nitrogen oxides.

The still incalculable costs of the affair – including regulatory fines and legal costs – pushed VW into the red for the first time in more than 20 years last year when it booked a loss of € 1.6 billion due to the provisions it was forced to set aside.

The provisions to cover repairs, buybacks and legal costs have so far amounted to around € 18 billion.

But in a sign that it was turning the tide, Volkswagen predicted yesterday that its full-year sales revenues “may reach the prior year figure”, raising its previous forecast of a 5% drop year-on-year.

It now also sees its operating return on sales – a measure of profitability– reaching the “upper end” of the previously forecast range of 5% to 6%. The improved outlook for the group came two days after a US judge granted final approval for a US$14.7 billion (RM61.5 billion) class action settlement in the emissions cheating scandal, the largest of its kind by a car manufacturer in history. – AFP