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Volkswagen Brands Post Improved Sales

"Volkswagen brand swung to an operating profit in the first quarter and earnings from its premium Audi brand rose 16 percent as the company broke out unit results for the first time," Volkswagen AG said last Wednesday. The increase served as a milestone for the automaker and etched the imprint of the new Chief Executive Martin Winterkorn's hand as a catalyst in transforming the company's fate.

The Plymouth cold air intake could be blowing a positive breeze to Europe's largest automaker. "The good market acceptance of our attractive models and the sustained benefits of our cost and process optimization programs are reflected in the figures for the individual brands," said Volkswagen Chief Financial Officer Dieter Poetsch. "All group brands improved their operating profit."

The German automaker reported 386 million euros or $525.2 million as its operating profit in the first quarter of the year compared with a loss of 49 million euros in 2006. The increase is pointed to the rise in the demand for new models. Also, old favorites increased progressively across Europe, South America and in Asia. The CrossGolf, CrossTouran, the Polo and other units.

The Audi AG reported an increase in the operating profit by 16 percent to 401 million euros or $545.6 million from 345 million euros. The increase was pulled in part by demand for the new A5 series and the launch of the new TT Roadster.

Skoda, the Czech-based unit of VW, saw its operating profit rise up by 20 percent to 172 million euros or $234.01 million from the 143 million euros in 2006 as the Fabia model draw new purchasers into showrooms and let them push their buying button.

The SEAT, the company's Spanish brand, had an operating loss of 11 million euros or $14.97 million, but that was slimmer than the 32 million euros loss it posted in the previous year.

VW earned 740 million euros or $1 billion in the first quarter, compared with 327 million euros a year earlier. Sales increased 5.1 percent to 26.6 billion euros or $36.19 billion from 25.3 billion euros. The information was divulged by the Wolfsburg-based automaker. VW reiterated that its vehicle sales around the globe increased by 7.9 percent in the first quarter to 1.47 million units.

A good slice of profit in China and eastern Europe and a modest increase in the United States helped offset a sales doldrums in the automaker's home market after the country increased its value-added tax rate in January. Looking ahead, Poetsch said that the company expects to "increase worldwide deliveries to customers slightly in 2007" and to exceed 2006's sales tally of 104.9 billion euros or $142.72 billion.

About The Author Given her background on cars as an auto insurance director, Lauren Woods finds the world of cars to be constantly changing.
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