Skoda rides to the rescue of VW’s fading car arm

WESTERN EUROPE
Škoda rides to the rescue of VW’s fading car arm
VW now forecasting a Group operating return on sales between 5.5 per cent and 6.5 per cent in 2014

Published: Fri, 31 Oct 2014 17:00:12 GMT
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The ill-effects of bright-burning incentive fires in much of Europe, ebbing sales in Russia and Brazil, together with trendbucking double-digit car sales losses in the still expanding US market have left their mark on the Volkswagen car brand.

But much of the slack has been taken up by its Škoda budget brand which almost doubled its nine months operating profits to €651m after posting a Prestige-Sector operating margin of 8 per cent during the third quarter - a level that even Mercedes’ car division wouldn’t mind boasting about

8%
Škoda's 3rd quarter operating margin

Volkswagen Cars, the current laggard in the group, ended this year’s first nine months with an operating margin of just 2.3 per cent, compared with 2.9 per cent during the corresponding period last year.

However, the company launched an efficiency programme for the VW Car brand aimed at lifting its operating margin to "over 6 per cent by no later than 2018".

reach the ten million deliveries mark this year
VW Group CEO Martin Winterkorn talking about VW Group targets

In terms of VW Group's operating profit, the company is now forecasting an operating return on sales of between 5.5 per cent and 6.5 per cent in 2014.

Nine months through the current year the group’s operating margin rose slightly to 6.4 per cent from 5.9 per cent. It reached 6.6 per cent during the 3rd quarter, bettering the respective 6 per cent and 6.5 per cent reached during this year’s first and second quarter...more

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8% Škoda's 3rd quarter operating margin

8%
Škoda's 3rd quarter operating margin