VW brand upbeat as cost cuts, new models boost Sept quarter earning

Cost cutting and new models such as the Arteon fastback should continue to boost Volkswagen's main car brand in the fourth quarter after it doubled core earnings in July-September, it said on Monday.

Analysts see reviving the VW brand, which has long suffered from high staff and development costs, as crucial to the group's ability to recover from its diesel emissions scandal.

The brand said on Monday it expected sales and profits to keep growing in October-December, despite the hit across the industry to demand of diesel vehicles and their resale value in the wake of the German carmaker's 2015 scandal.

"Our model offensive is increasingly paying off, the turnaround programmes in the markets are having an effect," VW brand chief Herbert Diess said in a statement.

Operating profit at the brand doubled to 728 million euros ($847 million) in the three months to Sept. 30, helped by cost cuts and staff reductions agreed with labour unions last year.

Volkswagen shares were up 2.9 per cent to 156.40 euros at 1150 GMT.

By contrast, the group's premium Audi division said it was bracing for a "demanding quarter" with costs for vehicle overhauls including the high-end A6, A7 and A8 as well as the Q3 and A1 compacts weighing on results.
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