Volkswagen Q1 profits beat even the higher estimates in a Reuters poll as the carmaker posts a surprise gain on special items related to provisions for its diesel emissions scandal. Julian Satterthwaite reports.
So much for a crisis at Volkswagen. The German carmaker reporting a surprise jump in profit despite the scandal over its cheating on emissions tests. Profit up more than three percent to nearly 3.5 billion euros in the first quarter. That's partly as costs of the scandal prove slightly lower than expected. Those figures for the group as a whole, however, which includes brands from Skoda to Porsche. The VW brand itself IS feeling real pain. Profit at that unit almost wiped out. (SOUNDBITE) (English) CO FOUNDER, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "When it comes to Volkswagen I often look at the motto of Audi which is 'Truth in Engineering', which of course if fundamentally what they haven't been doing in terms of no truth, actually it's a lie with some of their engineering. Not a good way to live up to your brand. So the problem with this for Volkswagen isn't so much what they've done and therefore the impact on the cars themselves, very good quality cars, they will continue to sell them. The cloud that hangs over them is actually just the issues of how many cases or claims against them are there going to be. Not so much in Europe but that far more litigious area known as the United States." Now company chief executive Matthias Mueller says 2016 will be a transitional year. But his firm's future seems secure. The VW group ekeing out a tiny gain in new car deliveries over the period. The rise of point eight percent enough to see it overtake Toyota for the title of world's largest carmaker.