Volkswagen first quarter profit rises 19%
Volkswagen first quarter profit rises 19%

First quarter profit of automaker Volkswagen increased 19% because cost cutting improved profit margins and also its namesake brand and European auto sales show a modest improvement.

Net profit climbed to 2.93 billion euros in the January-March quarter. Efforts of Volkswagen AG to decrease costs had saved over 100 million euros in the quarter alone at the Volkswagen brand and raised the profit margin to 2.0% from 1.8 %.

The brand gained ground in Britain, Spain and Germany during the quarter. According to experts, European auto sales in general are improving gradually as the economy is showing strength after the crisis over high government and bank debt in the 19 countries that use the euro currency.

The world's No. 2 automaker by sales said that its Volkswagen brand has worked hard to contain costs and improve profitability. Sales of group climbed by 10.3% to 52.7 billion euros and has benefitted from higher sales volumes, a better model mix, and exchange rate changes.

According to the company, its profit margin would come in between 5.5 and 6.5%. The company said that for the first quarter, it was 6.3% that is up from 6.0 % in the same quarter a year ago. Back in 2012, the company produced the second-largest number of motor vehicles of any company in the world. It also has maintained the largest market share in Europe for over two decades.

"We expect trends in the passenger car markets in the individual regions to remain mixed", said Chief Financial Officer Hans Dieter Poetsch.

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