Volk­swa­gen on track one year af­ter ‘Diesel­gate’ blow

The Sun (Malaysia) - - SUNBIZ -

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

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