VW posts third-quarter loss on emissions scandal
Volkswagen has reported a loss for the third quarter of 2015, as the costs of its emissions scandal continue to rise. It is the firm’s first quarterly loss in 15 years. As a result of the €6.7bn (around Rs 48,000 crore) the German manufacturer has set aside to cover the costs of rectifying vehicles fitted with its so-called ‘defeat device’, Volkswagen has reported an operating loss of €3.48bn (around Rs 25,000 crore) for the third quarter of this year, as well was a pre-tax loss of €2.52bn (around Rs 18,000).
Despite the news, shares in Volkswagen are currently up by 1.6% in Frankfurt.
In a statement issued today, Volkswagen only refers to the scandal as the “diesel issue”, with new boss Matthias Müller saying: “The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear. We will do everything in our power to win back the trust we have lost.”
The statement also notes that, “because of charges related to the irregularities in the software used for certain diesel engines, we expect 2015 operating profit for both the Group and the Passenger Cars Business Area to be down significantly year-on-year.”
VW Group sales in September were down 1.5% year-on-year, while Group sales for the third quarter were down 3.4%, to 2.39m cars, less than Toyota recorded.
However, the firm has already set out its recovery plan, which hinges on a next-generation version on the Phaeton. The new model was confirmed for production earlier this month, and will arrive as an all-electric rival to the Tesla Model S.
The new car will “be the flagship of the brand’s profile over the next decade”, the company says. The Phaeton is expected to reach production in 2020.
Revealing details of the car’s specification for the first time, Volkswagen said the car will feature “a pure-electric drive with long-distance capability, connectivity and next-generation assistance systems”.
Wolfsburg insiders with knowledge of Volkswagen’s future model plans say the electric Phaeton will share its platform architecture, drive system and battery technology with the upcoming Audi Q6 e-tron – as previewed by the e-tron Quattro concept at the Frankfurt motor show.
Volkswagen will reduce spending by €1 billion(around Rs 7,300 crore) per year in the wake of the dieselgate emissions scandal, as well as refocusing its development plans as the firm seeks cut costs and reaffirm its environmental credentials among car buyers. VW traditionally invests around €10bn (Rs 73,000 crore) per year on research and development alone.
Among the most radical decisions is an overhaul of the VW Group’s approach to diesel engines. From now on, the group will only use modern diesel engines with selective catalytic reduction and AdBlue injection in Europe and the United States – the two regions most heavily affected by its emissions scandal.
Development and modification of the group’s standardised MQB platform will also be accelerated, with a focus on bringing a new generation of plug-in hybrid vehicles to market. VW says it wants to produce hybrids with greater range, as well as developing new mass-market electric vehicles with a range of more than 186 miles. Alongside the new models, VW will also develop a new 48V mild hybrid system and create more efficient petrol, diesel and CNG engines.
Volkswagen will also create a new modular electric toolkit – dubbed MEB – which will be used across the VW Group brands. The toolkit be used for both passenger cars and LCVs and will be designed for all vehicle and body types. VW says the MEB toolkit will allow for “particularly emotional vehicle concepts”, and will enable an all-electric range of 250-500km (155-310 miles).
Hinting that the Group is also well on the way to developing purely autonomous vehicles, the statement also says: “A new standard with regard to connectivity and driver assistance systems is to be defined.”
Additionally, Volkswagen will accelerate its current efficiency programme. Company chairman Dr. Herbert Diess said: “The Volkswagen brand is repositioning itself for the future. We are becoming more efficient, we are giving our product range and our core technologies a new focus and we are creating room for forward-looking technologies by speeding up the efficiency program.
“We are very aware that we can only implement these innovations for the future of the Volkswagen brand effectively if we succeed with our efficiency program and in giving our product range a new focus.
“We are working at top speed on these issues. The Volkswagen team has proved it stands united and is fully focused on shaping the future. We have now laid the further foundations for that.”
Darren Moss (Autocar UK)