What's the news?
Want to know how much the repercussions of the 'dieselgate' emissions cheating scandal are hurting Volkswagen? By €16 billion, that's how much. That's how much the car maker has set aside to allow it to cope with the costs of recalling and repairing 11 million cars around the world, dealing with fines, legal challenges and more. It was enough to wipe out what would have been a €12 billion 2015 profit, and put Volkswagen Group into the red to the tune of just over €4 billion.
Still, Volkswagen's boss is putting his best foot forward. "The Volkswagen Group's operations are in great shape, as the figures before special items for the past fiscal year clearly show," explained the Chairman of the Board of Management, Matthias Müller. "Were it not for the sizeable provisions we made for all repercussions of the emissions issue that are now quantifiable, we would be reporting on yet another successful year overall. The current crisis - as the figures presented today also reveal - is having a huge impact on Volkswagen's financial position. Yet we have the firm intention and the means to handle the difficult situation we are in using our own resources."
It's not all bad news though. Volkswagen's liquid assets currently stand at around €24 billion, so it's well covered for the moment (although if, as some analysts have expected, the costs of 'dieselgate' rise to €44 billion, then there could be issues), and it expects its sales this year to be roughly in line with what they were in 2015, sufficient to keep Volkswagen well and truly in the top three car makers, globally.
"This year we are again operating in an exceedingly challenging environment in which global demand for new vehicles is declining, exchange rates and interest rates remain highly volatile and competition in many of our markets is intensifying. Added to this is the emissions issue, the extensive clarification of which will also be a dominant feature of the Volkswagen Group's work in the current year," Chief Financial Officer Frank Witter explained. "Regardless of this, we are confident that the Volkswagen Group will make good progress on its chosen path."
Volkswagen still has a long road to go on this - it's still wrangling with US state and federal officials, the Environmental Protection Agency, private lawsuits and more, hence its decision not to reveal its results until now. The company hopes that all of the investigations into 'dieselgate' (which include more than 65 million documents and 450 interviews by lawyers) will be concluded by the end of this year, as well (hopefully) the programme to recall and refit those 11 million cars.
Still, given that Mitsubishi has, this week, been exposed as a fuel economy cheat, and other car makers have been forced by the German government to recall their vehicles to have their emissions equipment altered, it might just be that some of the heat is moving away from Volkswagen.