Good performance from Volkswagen despite weak European market

Volkswagen Group has reported a 20% rise in third-quarter operating profit as it focussed on cutting costs to boost earnings. The German automaker, planning to snatch the sales lead from Toyota and GM by 2018, recorded Euro 2.78 b as earnings before interest and taxes, as compared to Euro 2.32 b the year before. While the earnings went up, revenue fell 3.8% to Euro 47 b. Working towards streamlining costs through higher technology sharing among its eight brands, three commercial vehicle businesses and the Ducati two wheeler business, Volkswagen, in India may not have any significant launch under its brand till 2015, it is aggressivley driving its group brands. The most recent being the launch of the new Skoda Octavia. The car lapped up 1000 booking with three weeks of its launch. If the current slow down in the Indian auto market makes Volkswagen look at the neighbouring China market, China rose to add to the global demand for Audi and Porsche luxury models, compensating for weaker deliveries in Europe, where a 20-year low in demand has hurt profitability of some of the loading European automakers. Early prenetration, and presence in emerging markets like China seems to have protected Volkswagen from a six-year European automotive market contraction. Expected to bring the Golf to India in 2015, Volkswagen’s revenues are likely to be driven by higher vehicle sales of its premium and sports luxury barends like Lamborghini and Bentley. In a related development, Volkswagen has launched the upgraded Jetta in India. The car is priced in the range of Rs 13.70 lakh and19.43 lakh (ex-showroom Delhi) repsectively. External changes include a mildy redesigned front with Xenon headlamps, headlamp washers, LED daytime running lights. The car also gets new 16-inch alloy wheels. Inside, the Jetta gets dual-zone climatronic air con, 12-way electrically adjustable driver’s seat and 60:40 folding rear seat.