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Volkswagen recently announced that it expects profits and sales to rise this year, especially as the Skoda Fabia and Audi A5 models are doing quite well in the market, plus the corporate overhaul the company is employing is reducing production costs.
The company’s chief executive, Martin Winterkorn, announced during the company’s annual conference that he expects earnings before interest, taxes and extraordinary items to be more than the 4.4 billion euros or $5.78 billion he earned in 2006.
He also said that the company’s first two-month sales were already up 8.3 percent to 862,000 vehicles, which is a good start for this year. He further added that the company expects to meet its target of increasing pre-tax profit for 2008 to €5.1bn compared to €1.1bn in 2004, which is the target set by former CEO Bernd Pischetsrieder. It should be noted that it was thanks to the efforts of Piech and Winterkorn that Pistchetsrider was expelled on January 1.
Volkswagen shares rise 3 percent to 102.96 euros
Last month, Europe’s largest automaker and producer of the popular Volkswagen shock absorbers reported that its revenue had more than doubled to €2.75bn which it attributed to the launch of its new models, the sale of the car rental unit Europcar vehicles and tax profit. Total revenue increased 12 percent to €104.9 billion.
The company also reported its fourth-quarter results and said its earned revenue has more than tripled to €1.54 billion from €435 million as a result of an 11 percent sales increase to €27.8 billion.
The Audi team that Winterkorn has brought with him, including Walter de Silva, head of design, and Ulrich Hackenberg, head of engineering, has spent two months alone to modify the new version of the Volkswagen Golf hatchback, which is currently the best-selling vehicle in Audi. VW. In addition to the Golf hatchback, the team is also working on other models that Wolfgang Bernhard, the former head of the Volkswagen brand, had started, such as the Scirocco sports hatchback and a new compact sports utility vehicle, the Tiguan.
CEO Winterkorn said: ‘We will continue to work hard on productivity and quality. We want to further increase the brand’s passion for building cars.” Volkswagen is also counting on its new models to increase its sales in the US. The total loss that VW has made in 2006 from its sales in North America has been reduced to euros in to the loss of 866 million euros in 2005. CEO Winterkorn also added, “we still have a lot to do here to get back on our path of successful growth.”
CEO Winterkorn is working to create a three-way combination for Volkswagen’s commercial vehicle unit and that includes Munich-based truckmaker MAN and Swedish truckmaker Scania, of which Volkswagen is the largest shareholder.