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Volkswagen profit jumps as it warns of a cooling auto market

FRANKFURT, Germany — 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 $4.42 billion (3.98 billion euros) as revenues rose 11% to $68.27 billion (61.42 billion euros). 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." 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.

How VW's hyper-efficient XL1 will influence the next Golf

In 2007, the European Union mandated fleet average CO2 emissions of 158.7 g/km. For 2015, that figure will drop to 130 g/km, and the target for 2020 is an ambitions 95 g/km. Thanks to some German politicking, that target will be phased in from 2020 to 2024, but it will still apply to 80 percent of passenger cars in that first year. In US miles per gallon, that's the equivalent of going from about 35 mpg to 42 mpg to 57 mpg. The current Volkswagen Golf is rated from 85 g/km of CO2 to 190 g/km depending on model - and zero for the e-Golf, so for the next-generation MkVIII hatch due in 2019, to meet the goal, Volkswagen engineers will need to introduce a bunch of new tricks. According to a report in Autocar, VW be mining its hyper-efficient XL1 for some of them.
Predictions for the next Golf include a variable-compression engine, an electric flywheel and an electric turbo, along with taking greater advantage of coasting. Volkswagen could be getting help from Audi with the electric turbo and variable-compression engine and electric turbo, with Audi already having shown off the former and brand technical boss Ulrich Hackenberg confirming the VW Group is working on the latter. It's possible the flywheel system could also have the mark of The Four Rings: Autocar mentions a British system that Volvo is testing, but the R18 e-tron Quattro racer has been using one for years.
The need for such features is because the company won't be able to net enough future gains from just aerodynamic improvements and advanced materials. As price will be a factor (the regulations are expected to "add hundreds of euros to the cost of building a car"), adding much more aluminum or carbon fiber is an unlikely option. We're told the next generation won't be longer or wider than the current car, and being Europe's most popular model, VW doesn't want to make a big bet on futuristic aero, but the report says the MkVIII will "likely" have "the most aerodynamic treatment yet seen on a production vehicle," the area where lessons learned from the XL1 will truly be seen.

Volkswagen Golf R Evo may debut at Beijing Motor Show

If a report in Auto Express is correct, a lighter, faster brother to the Volkswagen Golf R will be shown to the world at the Beijing Motor Show in April. Said to be called the Golf R Evo, the even harder hot hatch would be unveiled as one of those concepts that's practically a de facto presentation of the genuine thing. The Evo in its name will come from having a carbon fiber roof and CF in the bodywork, lighter wheels, thinner bucket seats up front and a roll cage instead of rear seats.
If there's a power increase, it's been described as "a small bump." However, as the report mentions, if the Jenny Craig regimen can drop 100 kilograms (220 pounds) from the the 3,247-pound weight of the European Golf R, then the Golf R Evo will do about the same damage on the scales as the Golf but have at least 50 more horsepower and 44 more pound-feet of torque.
Since we still don't have the current Golf, this isn't something that should keep you awake even if the 'concept' does become a production model. But it is good to know that the Golf R is really going to start pushing its boundaries.