Volkswagen AG, which aims for taking-over on the global auto-sales lead from Toyota Motor Corp. and General Motors Co. by 2018, is working to reduce costs with more sharing of technology among its eight car brands, three commercial-vehicle divisions and the Ducati motorcycle unit.
Volkswagen said its third-quarter operating profit amounts to 2.78 billion euros ($3.82 billion) beating estimates as Europe’s largest automaker successfully implemented cutting-cost strategy to boost earnings. Earnings have increased 20% from 2.32 billion euros a year earlier, Germany-based VW said today. Those numbers exceeded the 2.72 billion-euro average estimate of analysts. Revenue sank 3.8% to 47 billion euros and the shares rose the most in more than a year.
CFO Hans Dieter Pötsch expressed confidence about the Volkswagen Group’s chosen strategy in light of the developments expected in the automotive markets: “We are focusing on disciplined cost and investment management, as well as on further improving all of our processes. Together with our outstanding products, we believe that this is the right path towards becoming even more competitive. This is particularly important given the fact that the economic environment is not expected to improve in the short term.”
The car-maker sales for the quarter 3 period have increased to 2,368 from last year third quarters 2,333 which is a 1.5% increase. VW shares added as much as 8.65 euros, or 5%, to 183.50 euros, the biggest increase since September 14, 2012, and were up 4.8% as of 9:17 a.m. in Frankfurt trading. The stock has climbed 6.3% this year, valuing the German manufacturer at 83.1 billion euros.
Unlike most struggling European car manufacturers, Volkswagen managed to diversify its exposure as investing in various markets such as China and other emerging economies. This strategy has protected Volkswagen from a vast European auto-market contraction that has hurt demand at Paris-based Peugeot and Turin, Italy-based Fiat, which depend more on the region for business.
Audi brand unit sales were on a level unchanged from the previous year at one million vehicles. According to VW press release the Chinese joint venture FAW-Volkswagen sold a further 309,000 Audi vehicles. Audi reported an operating profit of 3.7 billion euros, or 12% drop on the back of negative mix effects, higher upfront investments in new products and technologies, as well as the expansion of its global production facilities.
Companys share price gained more than 5% today while it have advanced more than 6% this year. The current consensus among 32 polled investment analysts is to buy stock in Volkswagen AG.