Volkswagen increases profits, sales in shrinking markets

FRANKFURT, Germany (AP) - Volkswagen says after-tax profit rose by 24% in the second quarter as the company managed to increase its share in contracting markets, and as more-profitable vehicles took a bigger role in the sales mix.

Net profits rose to 4.11 billion euros ($4.58 billion) from 3.31 billion euros in the year-ago period. While the number of vehicles sold fell slightly, sales revenue rose 6.6% to 65.18 billion euros.

Chief financial officer Frank Witter said Thursday that "the Volkswagen Group performed very well in a generally weaker overall market."

Though the company reaffirmed its operating profit forecast for the year despite risks from trade protectionism and an expected slight contraction in the global auto market, it said profits would be toward the lower end of the predicted range.

The company said that over the first six months of the year "improvements in the mix and prices positioning" as well as lower one-time expenses were more than enough to compensate for higher fixed costs, unfavorable shifts in exchange rates and fewer vehicles sold. Unit sales slipped 1.8% to 2.75 million worldwide.

The company held to its outlook for operating return on sales between 6.5-7.5% percent but said the result would be toward the lower end.

Volkswagen, headquartered in Wolfsburg, Germany, also sells cars under the Audi, SEAT, Porsche, Bentley and Skoda nameplates.