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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

Bentley shifting W12 engine production to UK

Who would you think would be the largest producer of 12-cylinder engines in the world? Mercedes? BMW? Ferrari? Think again: as you might have guessed from the headline, it's Bentley. The thing is that, while all Bentley automobiles are manufactured in the UK, its engines aren't: while the 6.75-liter V8 in the Mulsanne is made at home, the innovative 6.0-liter twin-turbo W12 engine in Continental models so equipped (like the newer 4.0-liter twin-turbo V8) is shipped in from Germany. But that won't be the case any longer.
Bentley has just announced that production of the W12 engine is moving to its home base in Crewe by the end of this year. The shift in production (which follows the migration of the Flying Spur from Dresden to Crewe in 2007) will create 100 jobs in the UK - a country which employs some 142,000 workers in the automotive sector - and produce as many as 9,000 engines per year. That in and of itself would account for the vast majority of the 10,000-plus cars Bentley made last year, but will also make Bentley an exporter of engines for the first time in its history.
Right there at the factory, Bentley will fit the engines into twelve-cylinder versions of the Continental GT, GTC and Flying Spur, and send some back to Germany for use in the Audi A8. Applications within the Volkswagen brand itself like the Phaeton and Touareg no longer use the W12 engine, but could conceivably use it again in the future - they'll just have to bring them in from England is all.

Bentley Bentayga bodies to be built in Bratislava

Volkswagen's plant in Bratislava, Slovakia, has come a long way. After getting its start in 1971 by subcontracting the production of Skoda-branded vehicles, the plant was purchased by VW in 1991, where it was quickly put to further good use as it began producing Volkswagen Passat models for export. More recently, Bratislava has become a bastion for SUVs, assembling the Audi Q7 and Porsche Cayenne, in addition to the VW Touareg. Color us unsurprised, then, to learn that the Bentley Bentayga, which will be built atop the same large SUV platform as its cousins from Audi, Porsche and VW, will also be used for at least part of the production of Bentley's first SUV. Surely, though, one of the hallmarks of the Bentley brand is that its cars are handmade in England. Won't the Bentley-buying populace feel slighted by production in Slovakia? Not to worry. As is the case with the Porsche Cayenne, all that will be produced in Slovakia is the Bentayga's body. According to a report from Automotive News, bodies for the Bentayga will be shipped from Bratislava to Crewe, England, where they will be finished into fully operational vehicles. In order to accommodate the additional work, VW will reportedly invest 500 million euros into the plant in Slovakia and hire hundreds of workers.