Volkswagen Group said its full-year operating profit rose 22% to 16.9 billion euros ($18.5 billion) thanks to strong sales of higher-margin cars and lower diesel charges, defying an industry downturn that has cut the earnings of rivals.
Volkswagen is in the midst of ramping up sales of sports utility vehicles, which command better profits than ordinary cars, to 40% of passenger car sales from below 25% in 2018, while diesel related fines and settlements fell to $2.54 billion, down from $3.53 billion a year earlier. . . .
VW predicted vehicle deliveries this year would be stable at 2019 levels despite a declining market.
"The paring back of diesel charges is positive but I am skeptical that they can keep their outlook given the dip in China sales thanks to corona," Nord LB analyst Frank Schwope said.
Group vehicle deliveries rose 1.3% to 12.12 million last year, thanks to gains in Europe and south America as sales in Asia and the United States fell amid trade tensions.
The Wolfsburg-based company said market share rose in almost all regions, resulting in the rise in operating profit to $18.66 billion, which was up from $15.35 billion in 2018.
In terms of the operating profit for the group and the passenger cars division, VW forecast an operating return on sales in the range of 6.5% to 7.5% in 2020, but said this depended on external factors such as the geopolitical climate and the coronavirus outbreak. . . .
Also on Friday, Volkswagen and a major German consumer group said that they had reached an 830 million euro $916.65 million agreement in a class action lawsuit over the carmaker's rigging of diesel emissions tests.
The deal marks a further step in the German carmaker's efforts to make amends after it admitted in 2015 to using illegal software to cheat U.S. diesel engine tests.
The effort has cost Volkswagen more than $30 billion in vehicle refits, fines and provisions.
In the deal announced Friday, the $917 million will be divided among about 260,000 members of the class action. The exact amount depends on the age and model of the owner's car. . . .