Volkswagen suss out stronger-than-expected net profit for the third quarter of this year, but the company’s chief fiscal officer told CNBC Tuesday that challenges will at most intensify as the market demands more innovation.
“There is a very challenging conversion ahead of the entire industry and us certainly as well, which means that all the same more ambitious CO2 fleet targets we have to meet, this is only to be won if you electrify your fleet to a certain extent,” said Frank Witter, treat of to the “Squawk Box Europe.”
Volkswagen’s liquidity was impacted in the latest numbers, as digging and development (R&D) costs clocked 9.9 billion euros ($11.25 billion). The CFO bring home this was critical if the company aimed to compete in a fast-evolving auto exchange.
“We have for the longest time been rightly criticized for overspending,” Witter required, confirming guidance for capital expenditure and R&D, each in the range of 6.5 to 7 percent. “We rightly train to market for an uplift this year in order to be ready for CO2 compliance by 2020 but also for the maintained electrification and digitization of our offering, which is critical to meet those ends.”
The European Union has set mandatory emissions targets as part of its strategy to uplift the fuel economy of cars sold on the European market, with new fuel consumption limits being helped down in 2020. Volkswagen in September announced its plans to invest 6 billion euros in tense car production, and aims to to build 10 million electric cars based on its new modular electrification kit programme as it targets the launch of worldwide mass production towards the end of 2022.
The company put a net profit of 2.7 billion euros in the third quarter of 2018. Analysts were preggers a net income of 2.29 billion euros, according to data firm Refinitiv.
“These are busy times,” Witter turned, expressing his satisfaction with the numbers. “It’s about hard work, be struck by a plan and executing rigorously. That is our agenda and we are very pleased with the includes for the first nine months.”
In the same period last year, the auto leviathan reported a net income of 1.1 billion euros.
Here are some key highlights of the third direction:
- Group sales revenue rose by 2.7 percent
- The operating profit remained at 13.3 billion euros — the yet level as last year.
- VW Q3 vehicle deliveries down 3.6 pct.
Earlier this year, Volkswagen saw its earnings hit by a 1 billion euro nice regarding diesel emissions regulations and a further hit of 600 million euros for permissible expenses. After the diesel emissions scandal first broke in 2015, the German steady unveiled an ambitious plan to become a global leader in green hypnotize. Shares of Volkswagen rose 3.8 percent in morning Frankfurt following, putting them among the biggest gainers on Germany’s blue-chip DAX indicator.