Perception Gap, Made In Germany: Volkswagen Triples 2010 Half Year Profit

Bertel Schmitt
by Bertel Schmitt
perception gap made in germany volkswagen triples 2010 half year profit

Did we mention that there is a remake of the economic miracle in Europe going on? Despite tanking car sales, despite daily stories about near bankrupt EU-countries, European manufacturers are in high gear. Did we mention that despite imploding sales at home, Volkswagen delivered 16 percent more units to customers in the first six months of 2010? One would think that might have some bearing on VeeDub’s financials. It sure did.

In the first half of 2010, Volkswagen more than doubled its operating profit to €2.8b (€1.2b in H1 2009). But wait, this figure does not include the operating profit of €804m from the joint ventures in China. That number jumped from €294m in the same period of 2009. All in all, VW more than tripled its profit before tax to €2.6b (€0.8b H1 2009). Once taxes are paid, a tidy profit of €1.8b ($2.35b) will remain in Volkswagen’s books, a nice jump from €0.5b in the same period of 2009.

The good news “were clearly in excess of our expectations”, admitted Martin Winterkorn at the presentation of the interim report. Perception gap, made in Germany. His CFO Hans Dieter Pötsch added that “high demand for Group models in Western Europe, China, and North and South America was a key reason for our strong result, along with the boost provided by lower product costs and positive exchange rate effects.”

Volkswagen sits on something that has become nearly extinct in the business: a pile of money. According to a Volkswagen communiqué, “net liquidity in the Automotive Division increased further in the reporting period to €17.5b, up 42.2 percent year-on-year.” In US dollars, that’s around $23b in free cash-flow.

For the rest of the year, “the Board of Management expects that deliveries to customers will be significantly higher than in 2009, due among other factors to the positive business growth in China.” If you are a numbers junkie, the complete half year report can be downloaded here.

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  • Cabriolet Cabriolet on Jul 30, 2010

    This article started off good but the VW hate group seemed to take control. A lot of people love to run off at the mouth with no facts at all. I know many people who have many types of cars and the truth is Toyota's and Honda's do not run for ever. No car is perfect.I have been driving VW's for over 30 years and have had a few problems no big deal but overall most have run well over 200,000 miles. On the other hand i have also had Toyota's and Honda"s and a few Subaru's & Mazda and had a few problems with them. The worst was the Mazda complete junk. (Almost killed the dealer). Cheap, Cheap, Cheap. Had one accident in a VW MK2 with a Lincoln at 50 miles per hour and walked away with out a scratch. The Lincoln driver was not so luckly. I will keep driving VW's.

    • TheMyth TheMyth on Jul 30, 2010

      What is it with people and Audi/VW? The hate is palpable. I just drove an Audi A4 for 65k miles with zero problems. Zero. One of the best cars I've owned. And the dealership experience was by far the best I have encountered. I now have a VW GTI and problems. I know my experience is statistically irrelevant and all but I will let the cars talk for themselves and buy what I enjoy driving.

  • David Spinnett David Spinnett on Jul 30, 2010

    Amazing that VeeDub is doing so well. Quality is still a big step below Toyota. I still like em' though. Our Tourareg had a TON of problems, but fortunately most were under warranty. My Audi's have been great though, so mixed bag I guess. Still worth it over driving the deathly bland alternatives.

  • Art Vandelay I’d grab one of these if I’d spent my working life at GM for sure!
  • Analoggrotto The factory is delayed due to an investigation of a peter puffery ring lead by VoGhost, Tassos, EBFlex a Chevrolet Volt.
  • FreedMike Looking forward to the protests at the factory accusing Toyota of excessive woke-ism. First,, grooming. Lord help us all.
  • MrIcky I remember when Gladiators came out and everyone was shocked at how expensive they were. Now all the off road specials have caught up or passed it financially. I like this truck a lot, but I'd still take my Rubicon over this. I'd take this over the Ranger Raptor or Tacoma TRD though. When I found out the increase in track for the new TRD was just wheel offset-I knew they were just phoning it in. Why spend so much R&D on those stupid seats when you could have r&d'd longer arms or a front locker.
  • Alan Hmm, I see a bit of politicking here. What qualifications do you need to run GM or Ford? I'd bet GM or Ford isn't run by experienced people. Anyone at that level in an organisation doesn't need to be a safety whip, you need to have the ability to organise those around you to deliver the required results.