Emissions scandal burns through VW profits

Volkswagen saw profits tumble by nearly a fifth at the start of 2016
Volkswagen saw profits tumble by nearly a fifth at the start of 2016
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Volkswagen saw profits tumble by nearly a fifth at the start of 2016 as it continued to grapple with the fall-out from its global emissions scandal.

The group posted a 19.3% drop in pre-tax profits to 3.2 billion euros (£2.4 billion) for the three months to the end of March, with revenues down 3.4%.

But chief executive Matthias Mueller insisted it was a “respectable” result, with operating profits edging 3.4% higher to 3.4 billion euros (£2.6 billion) from 3.3 billion euros (£2.5 billion) a year earlier, boosted by one-off effects.

He said: “In light of the wide range of challenges we are currently facing, we are satisfied overall with the start we have made to what will undoubtedly be a demanding fiscal year 2016.

“We once again managed to limit the economic effects of the diesel issue and achieve respectable results under difficult conditions.”

Volkswagen faces heavy costs for recalls and fixes to cars with engine-control software that evaded emissions tests.

The company has already earmarked £12.7 billion to cover recalls and other costs for 11 million cars sold with the software globally.