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Volkswagen posts quarterly profit despite drop in sales

Volkswagen returned to profit in the third quarter as surging Chinese demand for luxury cars helped offset a 1.1% drop in vehicle deliveries due to the pandemic, sending its shares as much as 3% higher on Thursday. The German automaker's return to the black comes amid spiking coronavirus cases in Europe that led governments in France and Germany to order their countries back into strict national lockdowns on Wednesday. "The coronavirus remains a central problem," Volkswagen Chief Financial Officer Frank Witter said in a conference call with reporters. "This situation now is anything but relaxed." But Witter said the group expected the economic recovery to continue and did "not anticipate any nationwide lockdowns in larger markets." Witter said the takeover of U.S. truck maker Navistar International by Volkswagen's trucking unit Traton was an important acquisition, but the "current economic climate will not make this easy." Volkswagen reiterated it expects to post a profit for the full year, saying its business "recovered noticeably" in the third quarter as sales in China of premium vehicles, including Audi and Porsche sports cars, rose 3%. The quarterly performance was also aided by a series of cost-cutting measures launched earlier this year. Volkswagen said its net liquidity rose to 24.8 billion euros from 18.7 billion at the end of the second quarter. Excluding one-time items, third-quarter operating profit was 3.2 billion euros ($3.8 billion), down from 4.8 billion euros a year earlier, but up from a second quarter loss of 1.7 billion. In a note to clients, Jefferies analyst Philippe Houchois described the results as a "solid performance with strong cash, but relatively muted in the context of the (auto) sector recovery." Last week, German rival Daimler reported a record 24% jump in Chinese demand for its Mercedes-Benz cars, boosting its margins in the third quarter. Italian-American Fiat Chrysler Automobiles and Peugeot manufacturer PSA Group both also posted solid results this week. Witter said Volkswagen could not say for sure whether it would meet EU CO2 emissions targets this year, adding "it will be a tough race." At 1030 GMT, Volkswagen shares were up 2.9% at 129.20 euros. Related Video: Earnings/Financials Audi Bentley Bugatti Lamborghini Porsche Volkswagen

Audi will submit emissions fix for 3.0 TDI V6 to EPA and CARB

Audi will develop a software update for the emissions control system on Volkswagen Group's 3.0 TDI V6 and will submit the changes to the Environmental Protection Agency and California Air Resources Board for approval. If the government regulators accept it, the tweaks could end the emissions problems for an estimated 85,000 of these engines in the US in Audi, Porsche, and VW models. However, the stop-sale still covers these vehicles until further notice. Audi admits in its statement to failing to disclose three "auxiliary emission control devices" on the V6 to regulators, and US law considers one of these systems a defeat device. VW Group offered the engine in the US on the Audi A6, A7, A8, Q5, and Q7 since the 2009 model year. The mill was also available on the VW Touareg and Porsche Cayenne. The EPA filed a violation against the 3.0 TDI on November 2 because the agency reported that the engine's software contained a defeat device to circumvent emissions tests. The regulator recently extended that notice to cover these powerplants in the US from the 2009 to 2016 model years. Audi's statement vaguely estimates the price of this problem to be in the "mid-double-digit millions of euros," and the automaker could face financial punishment by regulators. "Determinations regarding potential penalties and other remedies will be assessed as part of the investigation EPA has opened in conjunction with the US Department of Justice," an EPA spokesperson told Automotive News. Related Video: Statement on Audi's discussions with the US environmental authorities EPA and CARB Auxiliary emission control devices (AECD) for US version of V6 TDI 3 liter engine to be revised, documented and submitted for approval Technical solution for North America versions from 2009 model year onwards to be worked out in conjunction with the authorities Audi will revise, document in detail, and resubmit for US approval certain parameters of the engine-management software used in the V6 TDI 3 liter diesel engine. That is the result of the discussions held between a delegation from AUDI AG and the US Environmental Protection Agency (EPA) and the California Air Resources Board (CARB). The updated software will be installed as soon as it is approved by the authorities. The three brands Audi, Porsche and Volkswagen are affected. Audi estimates that the related expense will be in the mid-double-digit millions of euros.

Ford Mustang outsold Audi TT and Porsche 911 in Germany

Despite being the antithesis of the cars Germany is known for, the new Ford Mustang was the best selling sports car in the land of schnitzel and beer last month by a whisker. The Mustang beat out the Audi TT by 780 units to 708, and it beat Germany's best known performance car, the Porsche 911, 780 to 752. That makes some sense, right? The Mustang has to be cheaper than those competitors, right? Not really. Both the EcoBoost and V8-powered Mustang have higher starting prices than the equivalent TT. The 2.3-liter, EcoBoost-powered Mustang starts at 38,000 euros (around $43,300 at today's rates), while the front-drive Audi TT starts at 35,950 euros (about $41,000). The V8-powered Mustang GT, meanwhile, starts at 43,000 euros (about $49,000), which is just 2,550 euros more than the Quattro-equipped TT. When 310 horsepower or 435 hp can be had for just a couple thousand more than 220 hp, it's easy to understand the Mustang's success. The 911, of course, is a lot more expensive than the Mustang. You can buy two Mustang GTs for the price of a single Carrera. But Ford also managed to beat out the Porsche's smaller siblings, the Boxster and Cayman twins, which sold a combined 642 vehicles. Again, the pony car is significantly cheaper, but that doesn't do much to lessen the impact of the Mustang's victory. If you're in Germany and are concerned about this American invasion, you shouldn't be (yet). The TT is Germany's best-selling sports car from January through March, with 2,299 to the Ford's 1,823. Porsche is breathing down the pony car's neck, too, with 1,811 units in 2016. It'll be interesting to see if Ford's successful March carries on into the rest of 2016. Related Video: