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Germany

Volkswagen powers to record profit in 2010

German car giant Volkswagen revealed record annual profits on Friday, and pledged further improvement for 2011. For the first time, the company sold over seven million cars in 2010. VW shares skyrocketed as a result.

VW staff working in the factory in Wolfsburg on a Volkswagen Tiguan.

VW's employees pumped out 7.2 million vehicles in 2010

Volkswagen on Friday announced record net profits of 7.2 billion euros ($9.9 billion) for 2010, a jump of over 700 percent compared to the previous year.

"The 2010 fiscal year was the best year in the history of the Volkswagen group," VW chairman Martin Winterkorn said in a statement.

For the first time, Volkswagen sold more than seven million vehicles around the world, representing a 13.7 percent year-on-year boost in sales volume.

Returns on investments also contributed to the rise in profits, especially the company's 49.9 percent stake in sportscar giant Porsche. VW has sought for some time to gain a controlling stake in the company, which would become the tenth car brand under the Volkswagen group's umbrella.

VW has invested heavily in emerging markets like China, India and Brazil, and says this strategy is now beginning to bear fruit.

worker cleaning a VW logo

VW is seeking growth in emerging markets, like India

The figures were well above market expectations, and VW predicted an even better performance for this year.

"We believe that 2011 turnover and operating profit for the company will exceed the preceeding year's tallies," Winterkorn's statement said.

VW is chasing Japanese auto giant Toyota, as it aims to become the world's top car seller.

Dividends and share prices rise

VW announced higher dividends for its shareholders, pledging 2.26 euros for holders of preference stock, and 2.20 euros for owners of ordinary shares.

At the close of Friday trading, VW share prices were up 6.2 percent at 119.4 euros, helping to push Frankfurt's DAX index up by 0.8 percent after a difficult week of trading marred by high oil prices.

Volkswagen's shares needed the boost as well, having slumped heavily in Thursday's trading amid fears of complications in its desired takeover of Porsche. The Stuttgart public prosecutor's office announced it would widen investigations centered around former Porsche boss Wendelin Wiedeking, raising the specter of hefty legal costs for the companies.

Author: Mark Hallam (AFP, dpa, Retuers)
Editor: Nicole Goebel

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