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Volkswagen warns of slowing global auto markets

Published: Wednesday, October 30, 2019 @ 6:26 AM
Updated: Wednesday, October 30, 2019 @ 6:25 AM


            FILE - In this March 14, 2017 file photo Volkswagen cars are lifted inside a delivery tower of the company in Wolfsburg, Germany. Volkswagen says its profits jumped 44% in the third quarter thanks to a more profitable mix of vehicles but warned that global markets are slowing more than expected and lowered its forecast for annual sales. (AP Photo/Michael Sohn, file)
FILE - In this March 14, 2017 file photo Volkswagen cars are lifted inside a delivery tower of the company in Wolfsburg, Germany. Volkswagen says its profits jumped 44% in the third quarter thanks to a more profitable mix of vehicles but warned that global markets are slowing more than expected and lowered its forecast for annual sales. (AP Photo/Michael Sohn, file)

Volkswagen says its profits jumped 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.

After-tax profit rose to 3.98 billion euros ($4.42 billion) 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.

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."

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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 automakers 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 Daimler, maker of Mercedes-Benz luxury cars, lost money in the second quarter and is expected to outline a cost-cutting strategy for investors on Nov. 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.