Volkswagen profit up 19% as cost-cutting takes hold
Automaker Volkswagen says first quarter profit rose 19 percent as cost-cutting improved profit margins at its namesake brand and European auto sales show a modest recovery.
Net profit rose to 2.93 billion euros (US$3.23 billion) in the January-March quarter, from 2.47 billion euros in the same quarter a year ago.
Volkswagen AG said Wednesday that its efforts to reduce costs had saved more than 100 million euros in the quarter alone at the Volkswagen brand, raising the profit margin to 2.0 percent from 1.8 percent. The Volkswagen brand was still hit by falling sales in Russia, which is suffering from economic sanctions over Ukraine and a fall in the ruble, and in South America.
But the brand gained ground in Spain, Britain and Germany during the quarter. European auto sales in general are bouncing back slowly as the economy recovers from a crisis over high government and bank debt in the 19 countries that use the euro currency.