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Volkswagen Brand Profit Sinks 86 Percent; Company Thanks God for All Those Other Brands

2016 Volkswagen Passat (6 of 14)

First-quarter earnings just released by Volkswagen Group show a massive strike to the company’s namesake brand name, all thanks to fallout from the diesel emissions scandal.

Profit at Volkswagen traveler cars fell Eighty six percent to 73 million euros ($81 million), down from 514 million euros last year. That plunge leaves the brand with a nano particle-thin operating margin of Zero.3 percent.

Still, the scandal isn’t a killing blow for the company. Why? Investment advisers aren’t lying when they say diversity is key to weathering shocks.

Overall working profit was upward 3.4 percent from Volkswagen Group (Three.44 billion euros), despite revenue slipping by the same quantity, to 51 million euros. The sound you hear is really a corporate group embrace for the money-making Porsche, Audi and Skoda brands.

Porsche and Skoda profits rose sharply over last year’s results, while Mercedes maintained its wholesome state, despite smooth sales. Also helping the company were currency changes that supported the $18.2 million set aside to deal with the cost of the scandal.

Volkswagen CEO Matthias Mueller recognized the parts of his company that weren’capital t Volkswagen, saying the actual company’s broad profile will help what promises to be a bad, bad year.

“In light of the wide range of challenges we are currently facing, we’re satisfied overall with the start we have made to what will undoubtedly be considered a demanding fiscal 12 months 2016,” Mueller said in a launch. “In the first 1 / 4, we once again were able to limit the economic effects of the diesel problem and achieve respectable results under difficult conditions.”

Over the course of 2016, the company expects revenues to decline up to five percent.

[Sources: Reuters, Bloomberg] [Image:??2015 Mark Stevenson/The Truth About Cars]

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