Volkswagen yearly profits double

Published:  28 Feb at 6 PM

As reported by the BBC, carmaker Volkswagen’s annual profits have doubled after the firm sold a record amount of vehicles in 2011. The company announced a net profit of 15.8 billion euros for 2011, compared with 2010’s figure of 7.2 billion euros.

The firm delivered over 8.2 million vehicles, a rise of almost 15% from 2010. Volkswagen plans to invest 62 billion euros on new factories and models during the next five years, in addition to research and development. VW also plans to hire 50,000 more staff during the next six years.

The firm plans to become the largest carmaker in regards to sales and profits before 2018. To help meet this target, the firm has created a new platform which will serve as a headquarters for its cars.

Michael Tyndall, who is an auto analyst at Barclays Capital, says that VW has been keen in recent weeks to tell investors of the fees associated with future business developments –particularly with a new platform that should produce cost savings of nearly 20% in 2013 and beyond.

However, like other car manufacturers, the EU’s economic slowdown is still a drag on the firm. Volkswagen has earlier highlighted the necessity to provide price competition in the EU, which suggests that the European market continues to be difficult, says Mr Tyndall.