2nd UPDATE: Audi 1Q Oper Pft -29%; Weak Demand For Luxury Cars
FRANKFURT (Dow Jones)–Audi AG (NSU.XE) said Monday that its first-quarter operating profit fell 29% amid waning demand for luxury cars, but it reiterated that, despite an anticipated fall in 2009 car sales, it still expects to fare better in the current industry gloom than its rivals.
“We remain confident to achieve a clearly positive result in the year 2009,” Chief Financial Officer Axel Strotbek said in a statement.
The premium brand and key earnings contributor of Volkswagen AG (VOW.XE), Europe’s largest automaker by sales, said first-quarter revenue was down 19% on the year to EUR6.7 billion from EUR8.3 billion amid lower car sales and unfavorable currency movements. Operating profit fell to EUR363 million from EUR514 million.
Audi said in recent years it had created “a sound basis on which to compete successfully even in economically difficult times,” but it couldn’t escape the effects of the global economic downturn.
“Additional measures have been taken in order to cushion the impact which the … downturn in demand is anticipated to have on profits (in) 2009,” Audi said.
Audi’s first-quarter car sales fell 16% year-on-year to 210,027 vehicles, a fall that was less severe than at its rivals due to solid demand for revamped and new models such as the Q5 sports-utility vehicle.
The world’s best-selling premium automaker BMW AG (BMW.XE) posted a 21% sales fall at its core brand to 233,498 vehicles in the first three months of the year as the downturn in the U.S., BMW’s biggest single market, took its toll. The world’s second best-selling luxury car maker, Daimler AG’s (DAI) Mercedes-Benz unit, saw sales contract 25% compared with the first quarter of 2008 to 216,000 cars.
Last week, Audi parent Volkswagen said it couldn’t give a reliable forecast for this year due to market volatility after it reported a 74% drop in first-quarter net profit to EUR243 million.
Executives had previously indicated that VW might make a loss in the first quarter, but the sale of its Brazilian truck operations kept it profitable. The Wolfsburg-based automaker’s first-quarter operating profit dropped 76% on the year to EUR312 million. Revenue fell 11% to EUR24 billion. Volkswagen is scheduled to post detailed earnings April 29.
Volkswagen doesn’t provide net profit on a quarterly basis for individual brands.
Sourced via online.wsj.com
