Volkswagen returned to profit in the third quarter as increasing Chinese demand for luxury cars helped offset a 1.1% decline in vehicle deliveries because of the coronavirus crisis, sending its shares as much as 3% higher on Thursday.
The return of the German automaker into profit comes amid increasing coronavirus cases in Europe that led governments in France and Germany to order their countries back into stringent national lockdowns on Wednesday.
“The coronavirus remains a central problem,” said Frank Witter, Volkswagen Chief Financial Officer in a conference call with reporters. “This situation now is anything but relaxed.”
But Witter said the group expected the economic recovery to continue and did not expect any nationwide lockdowns in broader markets.
Witter said the takeover of U.S. truck maker Navistar International by Volkswagen’s unit Traton SE was an essential acquisition, but the existing economic climate will not make this easy.
Volkswagen reiterated it expects to publish a profit for the full year, saying its business “recovered noticeably” in the third quarter as sales in China of premium vehicles, including Audi and Porsche sports cars, increased 3%.
The quarterly performance was also helped by a series of cost-cutting measures introduced previously this year.
Volkswagen said its net liquidity increased to 24.8 billion euros from 18.7 billion at the end of the second quarter.
Witter said the automaker could not say for sure whether it would satisfy EU CO2 emissions targets this year, as “it will be a tough race”.