Berlin - Volkswagen, which has struggled with high costs at its core VW brand, surprised analysts Thursday with strong third-quarter earnings boosted by its global subsidiaries, lifting the stock price of Europe's biggest carmaker.
The Germany-based company posted earnings before interest and taxes of 3.23 billion euros (R45 billion), 16 per cent higher than in the third quarter a year before.
Volkswagen stock shot up 4 per cent before settling at 163.00 euros in Frankfurt, up 0.6 per cent, as of early afternoon.
More than one third of the group's cars are made and sold in China, where business is profitable.
Its premium brands, Audi and Porsche, are also steady bearers of profit.
The new data also showed star-quality earnings at Skoda, the group's subsidiary in the Czech Republic which makes mainly budget cars. Skoda had an operating margin of 7.4 per cent in the nine months.
Chief executive Martin Winterkorn said there would be no let-up in the cost-cutting, which has sent a shiver through the main factories in Germany that make Volkswagen's signature compact, the Golf, and other mid-range cars.
“We must continue to focus on laying the foundations now that will enable us to respond to the major technological and economic challenges facing the automotive industry,” he said.
Using the data, news agency dpa-AFX calculated that at the core Volkswagen brand, the operating margin had improved from a lacklustre 1.8 per cent at the start of the year to 2.8 per cent in the third quarter.
Winterkorn has ordered the group as a whole to aim for a margin of 6 per cent by 2018. - Sapa-dpa