Berlin, Germany–German car giant Volkswagen saw revenue increase by 12 percent in the third quarter, driven by increased sales, although annual profits will be buffeted by costs incurred hedging against commodity price volatility, it said Friday.
The leading European manufacturer made sales between July and September of 78.8 billion euros ($83.5 billion) compared to 70.7 billion euros in the same period last year, according to the group’s preliminary results.
Operating profit for the quarter also increased, to around $5.19 billion, on an operating margin of 6.2 percent.
Volkswagen will release its full results on October 26.
Operational performance in the private vehicles division benefited from “significantly higher volumes” of sales. But that performance was held back by production difficulties at a subcontractor in Slovenia, whose factory was flooded during freak weather this summer.
An increase in production costs also weighed, according to the statement.
Annual operating profit before special items will be affected by negative hedging effects on raw materials to the tune of 2.5 billion euros.
The operating result is now expected at the level of the previous year — 22.5 billion euros.
Volkswagen left its vehicle deliveries and sales forecast for 2023 unchanged.
The group continues to expect it will shift between 9 and 9.5 million vehicles with a turnover 10 to 15 percent higher than in the previous year.
By mid-October, Volkswagen had reported a 7.4-percent increase in global sales in the third quarter, as strong demand in Europe and North America helped offset the decline in China, the world’s largest car market.
Volkswagen delivered 2.34 million vehicles over the July-September period, with a 20-percent jump in sales in Western Europe.
But in China, deliveries fell by 5.8 percent, to 837,200 over the period.
In the first nine months of the year, they fell by three percent.
In the Chinese market, where Volkswagen has so far made around 40 percent of its sales, the German group faces competition from the United States’ Tesla and local manufacturers of electric cars, which threaten the vice-like grip it has held on combustion engine sales.