Car industry in for a rough ride, warns Volkswagen
FRANKFURT - Volkswagen says its profits jumped by 44% in the third quarter thanks to a more profitable mix of vehicles in its lineup, but warned that global car markets are slowing more than expected and lowered its forecast for annual sales.
The Wolfsburg-based automaker pointed to the headwinds facing the industry by saying that it expects "vehicle markets will contract faster than previously anticipated in many regions of the world."
It said sales would be "on a level" with last year's record of 10.8 million vehicles. Previously it had expected a slight increase. The company said its profits would be in the lower end of its forecast range.
Global carmakers are facing a slowdown in sales amid disputes over trade and from pressure in the European Union and China to develop and sell low-emission vehicles that require heavy investment in new technology.
Ford and Renault have issued profit warnings in recent days, while Mercedes-Benz parent company Daimler lost money in the second quarter and is expected to outline a cost-cutting strategy for investors on November 14.
Volkswagen is leading the push into electric vehicles in Europe by launching its ID.3 battery-powered compact car at prices it says will make zero local emission vehicles a mass phenomenon. The company was able to increase earnings in the quarter despite an 18% rise in spending on research and development.
Volkswagen's after-tax profit rose to 3.98 billion euros (R66bn) in Q3, as revenues rose 11% to 61.42 billion. The sales margin of 7.8% exceeded the goal of 6.5-7.5% as vehicles bringing higher profits took a larger share of sales.