Volkswagen Is World's Largest Automaker - By Profits

by Bertel Schmitt

March 12th, 2012 12:03 PM

volkswagen is world s largest automaker by profits

The podium was all smiles when Volkswagen reported an unheard-of profit of €18.9 billion ($24.8 billion) before tax, which turned into €15.8 billion ($20.7 billion) after the taxman got his €3.1 billion share. When Volkswagen announced this today in the annual results press conference, there was one man who grinned even more than anybody else.

That man was Stefan Winter. He is a reporter of the Hannoversche Allgemeine. He r eported a month ago that Volkswagen would have a €16 billion profit. And he was right. The world’s second largest automaker in volume definitely is the largest in profits. For details, the annual report is available here.

#BertelSchmitt #Germany #Results2011 #Volkswagen

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17 of 21 comments

Bikegoesbaa on Mar 12, 2012

Who cares about profits? Everybody knows that the real measure of an automaker is is how many Chinese delivery vans their minority-stake joint venture can crank out in a year.

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- SherbornSean on Mar 12, 2012
  
  +1
  
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Chuckrs on Mar 12, 2012

At current US C corporation tax rates, the US government would take 6.62 billion Euros equivalent in dollars from VW, not 3.1 billion. Evidence of the Laffer Curve at work? Apple has $54 billion overseas they aren't repatriating. We don't need a complete overseas tax holiday, but for creating real jobs, a reduction in corporate tax rate in general couldn't possibly be worse than current government policy and its election year class warfare stance.

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- Bd2 on Mar 12, 2012
  
  With all the loopholes, tax credits/deductions, special provisions, etc. in the US tax code, the effective US corporate tax rate is much lower. The big US corporations would rebel if the corporate tax rate was lowered, but all the loopholes, etc. were done away with (tho, the smaller companies would probably be happy with it).
  
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- Joeaverage on Mar 12, 2012
  
  @bd2 +1 bd2
  
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- Skor on Mar 12, 2012
  
  @bd2 Yup. The stated rate and the actual rate are two different things. Many profitable US corporations pay nothing in taxes.
  
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- Steven02 on Mar 12, 2012
  
  @bd2 One of the reasons that companies don't pay taxes are from loopholes I agree, and these loopholes end up with all of the profits being made in a different country and that can't be reinvested in the US without taking an additional 35% tax burden on what is brought back in. That means that the investments are going to stay overseas.
  
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- Chuckrs on Mar 12, 2012
  
  @bd2 Steven02's response is the correct one. And the correct action is to eliminate the loopholes and reduce the rates to ones competitive with the rest of the world. This wouldn't be a tax holiday; it would be an admission that we are currently shooting ourselves in the (collective) foot. We get neither the tax revenue nor the jobs for skilled and unskilled workers arising from reinvestment in the US.
  
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- Charly on Mar 12, 2012
  
  The official German tax rate for corporations is about the same as it is for the USA.
  
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- Chuckrs on Mar 13, 2012
  
  @charly I certainly don't understand the US tax code, let alone the German one. But it looks like VW paid less than half the official corporate tax rate. Here's a Brookings opinion piece on the problem in the US: www.brookings.edu/opinions/2012/0220_foreign_earnings_pozen.aspx BTW, Brookings is described as centrist/left-leaning.
  
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- Joeaverage on Mar 15, 2012
  
  @bd2 Sure wish the politicians would listen to you guys...
  
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- Stephen on Sep 19, 2012
  
  @charly I'm coming into this discussion late, but Stephen02is correct. Lower the taxes, eliminate the loop holds and get the money back to the US. VW is the most profitable car maker in the world and they get tax credits from Germany and the other countries they build cars in.
  
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Icemilkcoffee on Mar 12, 2012

Just as HP figured out that you could sell printers at a loss, and make up for it by selling ink catridges at a premium; VW sells its cars at a decently low price, and makes its profits by selling overpriced parts to fix these same cars.

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- -Cole- on Mar 12, 2012
  
  You definitely have it all worked out.
  
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- Beerboy12 on Mar 12, 2012
  
  Funny, people don't typically buy poor quality, unreliable cars. Ask the big 3 that. Toyota proved that reliability sells cars. Now I am trying to understand how VW's are so poorly made and still manage to sell? I am not implying that VW's are as reliable as Toyota's but they are not that bad and they are rewarding cars to drive which is worth it.
  
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- Joeaverage on Mar 15, 2012
  
  That theory works except you forgot the part about aftermarket replacement parts and independent mechanics... I think folks like their VWs enough for various reasons that they'll put up with any shortcomings. Just like GM, Ford, and Chrysler owners. Apparently the VW owner can afford whatever it takes to feed and repair their VWs. Or not b/c I see some obviously neglected VWs running around my town. They run fine but they aren't getting any TLC. I have found my VWs to be no worse than American brands but better in some subjective ways that are important to me - the look, sounds, how they drive, and so forth - for examples. Just like the big pickup truck guys have reasons they like to tool around town in their rides. And I also find that the aftermarket has very cheap replacement parts through places like BusDepot thanks to international markets.
  
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84Cressida on Mar 12, 2012

Isn't Toyota still worth far more than any other automaker?

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