· Volkswagen’s first quarterly loss in response to the scandal in the past 15 years, costing 78 billion euros

Editor's note:
Exhaust emissions fraud, not only eclipsed the global volkswagen's gold signboard, but also the defect - the price of lies is that Volkswagen Group for the first time in 15 years of quarterly losses.
According to Volkswagen's recently released 2015 third quarterly report, 6.7 billion euros was spent in September to deal with the “fake door”, resulting in a loss of 3.48 billion euros. At the same time, due to the "fake door" incident, mass sales in September fell by 1.5% year-on-year, causing Volkswagen to return the throne to rival Toyota after winning the global sales champion for three months.
Muller, the new CEO of Volkswagen, said in a statement that the influence of the “fake door” on the public is becoming clearer. Some analysts expect that the funds spent by the public to deal with emissions fraud may be between 20 billion and 78 billion euros. This is not the ultimate price of lies.
The diesel car emissions fraud incident caused Volkswagen to spend an additional 6.685 billion euros in September and caused its first quarterly loss in nearly 15 years.
On October 28, local time, the Volkswagen Group released the third quarter 2015 financial statements. Due to the deduction of the “special project” expenditure of 6.685 billion euros, Volkswagen incurred huge losses in the third quarter, with a quota of 3.479 billion euros. At 6.8%, the operating profit for the same period last year was 3.230 billion euros, and the operating profit margin was 6.6%.
The Volkswagen Group pointed out that the above business figures do not include the profit sharing of Chinese joint ventures. According to statistics, from January to September, Volkswagen will also receive a net profit of 3.8 billion to 3.9 billion euros from its joint venture in China.
Volkswagen CFO Frank Witter said: "The Volkswagen Group has very stable liquidity resources, which will help us to cope well with the challenges brought about by diesel events."
The scandal’s sky-high expenditures have a “special items” expenditure in the third quarter financial statements of the Volkswagen Group, which mainly refers to the costs incurred by the subsequent impact of the “diesel emissions fraud” event, including government fines. Costs incurred by recalls, corresponding technical support, etc.
The data showed that Volkswagen achieved a pre-tax profit of 3.206 billion euros in the third quarter before deducting the “special project” expenditure.
In the first three quarters, a total of 10.2 billion euros of pre-tax profit was realized. The accumulated operating income reached 160.263 billion euros, up 8.5% year-on-year compared with 147.78 billion euros in the same period last year.
Volkswagen Group's new CEO, Muller, said at Volkswagen's headquarters in Wolfsburg on the 28th local time: "Good operating income highlights the core strength of Volkswagen Group on the other hand, and the impact of diesel engine emissions is also becoming Clear, we will do our best to win back the lost trust."
An auto engine engineer from Germany, who asked not to be named, said in an interview with a reporter from China Business News that Volkswagen must make a decision on the balance between power and emissions as soon as possible, and continue to maintain its current efficiency and environmental protection. Image, it is necessary to increase investment in research and development, and regain customer recognition.
Although it is predicted that Volkswagen will pay a heavy price for the "emissions fraud" incident, it is not yet possible to calculate the specific figures, although in the third quarter it has been accrued up to 6.685 billion euros. According to forecasts, this part of the expenditure is mainly used for Volkswagen's investment in related vehicle recalls and corresponding exhaust emission technologies.
In addition to the cost of recalling the removal of cheats, Volkswagen may also face fines in many countries, with the US Environmental Protection Agency considering an unprecedented $18 billion in fines.
On September 18, Volkswagen was exposed to fraud in some diesel vehicle emissions tests. Vehicles equipped with the Type EA diesel engine use cheat software, which emits tens of times more nitrogen oxides than the US standard under outdoor non-experimental conditions. According to data released by Volkswagen, the entire "emissions scandal" involves 11 million Volkswagen cars around the world.
“Whether the loss will continue to be accrued in the next quarter or annual report, it is not yet possible to give specific forecasts, depending on the specific amount of penalties in each country, especially the final penalty figures of the US government.” Although the above-mentioned insiders gave continued observation The answer, but "as long as there is no big change in the Chinese market, Volkswagen will still maintain a good book value."
The power of salvation in China?
Although the entire market is still facing constant challenges, Volkswagen has not adjusted its sales targets for the whole year. However, due to diesel emissions fraud and the challenging economic environment in Eastern and South America, Volkswagen has lowered its full-year profit target: “We expect operating profit to decline sharply in 2015. The annual sales return is 5.5% to 6.5%. between."
For a long time in the past, Volkswagen has been appearing in the national automobile market with an environmentally friendly and efficient image. As the emission fraud incidents are made public, the public must first solve the problem after dismantling the cheating software in order to meet the continuously improved emission regulations. It is the problem of excessive emission of nitrogen oxides caused by high-pressure operation of diesel engines. If the exhaust gas recovery device is not found out as soon as possible, it is necessary to reduce the compression ratio of the diesel generator when it works. The impact is that the engine power is reduced. The power is greatly reduced.
The new CEO of the Volkswagen Group, Muller, said on October 6 that Volkswagen will recall the problem vehicles involved in the “Drainage Door” incident as early as January next year, and will complete all return-to-factory repairs by the end of next year. But the specific solution has not yet been released.
However, as long as there is no major change in the Chinese market, even if all other markets lose money, the Volkswagen will be very moist."
Just like the data given by Volkswagen, the two major joint ventures of Volkswagen in China in the first three quarters will provide profits of 3.8 billion to 3.9 billion euros, but in addition to this figure, the Chinese market also provides more for Volkswagen. Numbers outside the book. The insiders pointed out that the figures under these books are counted in the overall profit of Volkswagen, which will not be lower than the direct profit share. One of the key businesses is the procurement of key components.
At the same time that the 2025 strategy third quarter earnings report was released, Volkswagen also released a five-point plan for Muller to lead the future work of the Volkswagen Group. In this statement, Muller pointed out: "We must see that the current strength of the Volkswagen Group can guarantee that we can succeed."
Muller said that the restructuring will make Volkswagen the best car manufacturer in the world in the future. "It will protect Volkswagen more powerful than before." "It will become the cornerstone of Volkswagen's 2025 strategy."
The first is to regain the support of the customer, Muller said that the customer is the parent and survival of the 600,000 employees of the Volkswagen Group.
The second is to continue to understand the "diesel fraud" incident and correctly respond to its consequences. "We must find out the truth, learn the lesson, and analyze it carefully." Muller pointed out that Volkswagen has hired Deloitte & Touche to provide it. stand by.
The third focus is on introducing a new management structure in the Volkswagen Group. Muller pointed out: "The future brands and markets of the Volkswagen Group will receive more autonomy. The board of directors provides support in multi-brand strategy to synergistically and effectively utilize the various resources of the group." With more than 300 portfolios, “We will carefully study each model and make continuous optimization improvements.”
Fourth, “We need a culture of development and cooperation,” Muller points out that the public needs to change the way it handles errors. Volkswagen must have more creativity and the ability to take on social responsibilities, entrepreneurship and a culture that keeps improving and driving the advancement.
Muller’s fifth work plan is to re-establish Volkswagen’s development strategy for the next 2018-2025. Muller pointed out that Volkswagen's previous "higher and faster 2018 strategy has a certain deviation", Volkswagen's ultimate goal is not to "produce 100,000 more cars than competitors to obtain higher profits." According to the announcement, Volkswagen will re-plan the next month and announce the new Volkswagen "2025 Strategy" at the annual meeting next year.

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