VW beats forecasts in 2018, still marked by diesel fallout

Wolfsburg, Germany

MAMMOTH German carmaker Volkswagen reported on Thursday growing profits and revenues in 2018, beating analysts' forecasts despite enormous charges linked to its "dieselgate" emissions cheating scandal and headwinds from tough new pollution tests.

The Wolfsburg-based group said it boosted its bottom line 6.0 per cent year-on-year to 12.15 billion euros (S$18.6 billion), higher than expectations from analysts surveyed by Factset.

Selling 10.8 million vehicles around the world from its 12 brands brought in 235.8 billion euros, with revenues posting slower growth than profits at 2.7 per cent. And operating, or underlying profit added just 1.0 per cent, to 13.9 billion. "We performed very well in spite of strong headwinds," chief executive Herbert Diess said in a statement.

One major burden was the WLTP emissions tests, introduced since VW's 2015 admission that it manipulated millions of cars worldwide to appear less polluting . The introduction of the new process in September cost VW almost one billion euros by slowing production, a spokesman told AFP, with the effect visible in a fourth-quarter operating result 4.2 per cent lower year-on-year, at 3 billion euros.

Meanwhile the group notched up 3.2 billion euros in special items to cover costs relating to "dieselgate", the same as the previous year.

A sizeable chunk of the costs came in Germany as VW paid a group-wide fine of 1.0 billion euros, while high-end subsidiary Audi had to forfeit 800 million euros. Since 2015, legal costs, fines, buybacks, and refits to affected cars have cost VW 29 billion euros, the group said.

Looking ahead, VW said it had expanded its plans for a vast array of electric models over the coming decade to 70 rather than 50, aiming to sell 22 million battery-powered cars by 2028. It hopes the offensive will help it meet strict new carbon dioxide emissions requirements in the European Union.

"The share of electric vehicles in the group fleet is to rise to at least 40 per cent by 2030" with Korea's LG, Samsung and SK Innovation and China's CATL providing the vital battery cells to power the drive.

"Volkswagen is also taking a close look at possible participation in battery cell manufacturing facilities in Europe," it added.

On a closer time horizon, VW aims for "slightly" higher unit sales this year than in 2018, with revenues "as much as 5.0 per cent" higher and an operating profit margin of between 6.5 and 7.5 per cent - up from 5.9 per cent last year. AFP