Driven by a surge in demand for luxury cars by customers in the Chinese market helped the German auto giant Volkswagen AG to offset a decline of 1.1 per cent in delivery of vehicles because of the currently on going novel coronavirus pandemic. It also helped the largest automotive company of the world in terms of production capacity to return to a path of profits in the third quarter of the current year.
The company also reiterated its earlier projection of tweaking out a profit for the full year, said the German auto maker and said that its business “recovered noticeably” during the most recently ended quarter with a 3 per cent growth in sale of its premium vehicles, including Audi and Porsche sportscars, in the Chinese market.
A number of measures to cut down on costs that were launched by company earlier this year to offset the hit to its business because of the pandemic also proved beneficial for the company, VW said.
“(The cost cuts) had as much of an impact as the continuing improvements in the situation in key sales markets,” VW said.
During the third quarter, there was also an improvement in the net liquidity of the company which came in at 24.8 billion euros compared to the value of 18.7 billion at the end of the second quarter, which was lower, the company said.
The operating profit of thee company for the third quarter, excluding one-time items, came in at 3.2 billion euros ($3.78 billion), compared to 4.8 billion euros reported by the company in the same period a year earlier.
The adjusted operating return on sales in its automotive division dropped to 5.4 per cent during the third quarter compared to 7.4 per cent in the same quarter a year ago, VW said, but added that it was better than the minus 5.8 per cent reported for the same figure by the company in the second quarter.
While the full year profits of the company would still be “severely lower” compared to that it had achieve in 2019, it would still be in the “positive territory”, the German automaker said.
In the second quarter of the current year, a loss of 1.7 billion euros was posted by the company because of thee hit to its business due to the Covid-19 pandemic which caused government in all parts of the world imposing strict restrictions on movement, economic crises and swathes of job losses globally.
(Adapted from TV18.com)