Underlying profit before special items hit a new record in 2016, at €14.6 billion, up 14%, boosted by record sales of Audi and Porsche cars. The VW Group's total vehicle sales were also record-breaking, at 10.3 million units, making it the bestselling carmaker worldwide, overtaking Toyota.
However, one-off special item charges were bigger than expected at €7.5 billion, with €6.4 billion related to the emissions scandal, particularly for hedging against legal risks. Some analysts estimate the diesel emission-cheating scandal may ultimately cost the company more than $30 billion (€28 billion) in fines, compensation and vehicle refits. Volkswagen also still faces hundreds of investor lawsuits and a criminal probe in Germany.
CEO Matthias Müller said: ‘While the past fiscal year posed major challenges for us, despite the [diesel emissions] crisis the Group's operating business gave its best-ever performance. Volkswagen is very solidly positioned in both operational and financial terms.’
He said that VW Group’s new structure for the multi-brand group means responsibility is now decentralised, adding: ‘We will become faster and more focused and efficient.' This will be welcome news for investors and analysts who believe that the cost base of VW's German plants is key to recovery and long term competitiveness.
VW’s sales margin rose to 6.7% from 6% in 2015. It forecasts broadly stable earnings this year. VW expects passenger car sales to slow overall in 2017, but that its own sales will ‘moderately exceed’ last year’s.
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