German carmaker Volkswagen AG said Thursday net income for the third quarter fell 86 percent as the global downturn affected demand for its cars and trucks.
FRANKFURT (AP) — German carmaker Volkswagen AG said Thursday net income for the third quarter fell 86 percent as the global downturn affected demand for its cars and trucks.
Europe’s biggest automotive group by sales reported net income of euro172 million ($253 million), down from euro1.2 billion in the July-September period a year ago.
VW, based in Wolfsburg, said sales for the quarter fell 10.3 percent to euro26 billion from euro29 billion in the third quarter of 2008.
The company said full year revenue would be lower than in 2008. Rising refinancing costs and the deterioration of sales for some brands would drag on the company’s earnings. VW said it would attempt to counter the trend with cost and investment management and better efficiency.
Shares of VW were 1.5 percent higher at euro111.77 in Frankfurt morning trade.
Volkswagen’s brands include Audi, Lamborghini, Seat and Skoda. It recently started a merger process with Porsche AG and the company is also a major shareholder in MAN SE and Scania AB, two of Europe’s biggest truck builders.
Nine month net income fell 81 percent to euro719 million from euro3.8 billion in the same period of 2008. Group revenues fell nearly 10 percent to euro77.2 billion from euro85.4 billion in the January-September period of 2008.
The VW brand cars division saw revenue fall 16 percent to euro47.5 billion from euro56 billion in the first nine months. Revenue at Audi fell 15 percent to euro22 billion from euro26 billion in the January-September period of 2008.
Despite the drop in revenue and earnings, the company said it saw comparatively strong demand for its products. Worldwide deliveries in the first nine months of the year were almost unchanged from the year-ago period, while the overall passenger car market fell by nearly 12 percent.
China reported a 37 percent increase in nine month deliveries, while Brazil booked a 6.4 percent increase.
German deliveries in the January-September period were 21 percent higher largely due to the country’s car scrapping program. However, overall deliveries in Europe fell nearly 9 percent in the January-September period.
North America showed a near 9 percent decline in January-September deliveries.