Sales revenue grew 21.4 per cent to €25.3 billion (£17.4 billion). Operating profit before special items increased 55.1 per cent to €726 million (£499.7 million).
Finance director Hans Dieter Pötsch said on Friday: “At first sight, double-digit growth in deliveries to customers is encouraging. But this will not continue during the remainder of the year as it is based on weak first quarter figures for 2005.”
In the first quarter of this year, the Volkswagen brand group reported an operating profit of €134 million (£92 million), €187 million (£128.7 million) higher than the negative figure for the previous year.
Deliveries to customers ran at 927,000 vehicles, an increase of 16.1 percent over the prior-year period. Key factors were full availability of the Passat, Jetta and Golf Plus and sales successes at Skoda in the first quarter of 2006.
At €318 million (£218.8 million), the Audi brand group’s operating profit in the first quarter of 2006 was five per cent up year-on-year, primarily as a result of a 13.4 per cent increase in sales, to 334,000 vehicles. Audi group operating profit was affected by the continuing ‘unsatisfactory’ earnings situation at Seat.
The VW Commercial Vehicles business reported an operating profit of €36 million (£24.8 million), an improvement of €75 million (£51.7 million) year on year. Volkswagen Commercial Vehicles delivered 99,000 vehicles, an increase of 11.4 per cent.
The Financial Services Division generated an operating profit of €237 million (£163 million), slightly up on the prior-year period, and again made a significant contribution to group profit.
Pötsch said the increase in sales volume was driven by the large number of new models launched. “Revenue per vehicle has risen, while at the same time sales and marketing costs per vehicle have fallen. That clearly shows we have not bought our stronger position in the markets but have focussed our investment on sales concepts and finely-tuned financial services throughout the automotive value chain.”
With VW facing tough union negotiations in Germany over job cuts, Pötsch emphasized that its key automobile markets had started the year with a positive underlying trend, but that general economic conditions continued to present not inconsiderable risks for automotive demand.
Overall, though, VW expects slight growth in global sales during the full year, and Pötsch reaffirmed that 2006 operating profit before special items would improve over the previous year.
Furthermore, the Automotive Division was expected to report a positive net cash flow and a further improvement in net liquidity in 2006.
However, on the group’s continuing ‘unsatisfactory’ return on investment, Pötsch said: “These quarterly results show that the measures we are implementing under our cost-cutting and performance enhancement programmes are taking effect. But the return on investment is still well below target. We must continue to work hard at restructuring, particularly regarding the core Volkswagen brand.”