FRANKFURT — Volkswagen Group reported an 19 percent drop in third-quarter adjusted operating profit to 3.51 billion euros ($3.99 billion), weighed down by weaker vehicle sales and headwinds tied to the introduction of more stringent emissions rules in Europe.
However, VW reiterated its goals for the year, as robust results from the Porsche luxury brand helped to stem the fallout from trade tensions, a cooling Chinese market and the new WLTP emission test in Europe that triggered costly production bottlenecks.
“We are still facing major challenges that we and the entire automotive sector have to overcome,” VW Group CEO Herbert Diess said in a news release on Tuesday.
Volkswagen has struggled to ready its models for WLTP introduced in Europe in September, causing production disruption and pricing pressure. This resulted in a 3.6 percent decline deliveries during the quarter as some car models were unavailable for sale. The potential impact on earnings could be more than $1.14 billion.
VW affirmed its target for 2018 operating return on sales before special items at both the group and its passenger cars business area to come to 6.5 percent to 7.5 percent after 7.4 percent in 2017.
Including special items, such as an 800 million euros fine against VW’s premium brand Audi for diesel violations in Germany, the adjusted operating margin will fall moderately short of the expected range, it said.
VW anticipates revenue growth of as much as 5 percent this year on “moderately” higher deliveries after last year’s record 10.7 million vehicles.