Volkswagen Profit Energizes Future Plans

SEE ALSO: Volkswagen Buyers Guide

Washington DC May 3, 2007; The AIADA newsletter reported that Volkswagen's positive first-quarter results were exactly what Porsche Chief Executive Wendelin Wiedeking had in mind when he took a controlling stake in the German automaker last year.

Business Week reported that VW's operating profit for the first three months of 2007 rose 81%, to $1.48 billion, generating a 4.1% margin.

As Winterkorn rolls up his sleeves to continue the retooling at VW, his biggest job is building a real export powerhouse. For all its huge $143 billion in revenues, Volkswagen's success remains largely centered on Europe.

To take on Toyota Volkswagen has to build serious sales muscle in the U.S., where last year it sold only 397,000 cars. To bolster VW's weak U.S. operations, Winterkorn is betting on new models—including a van to be launched in 2008—lower costs, improved quality, and revamped sales and marketing strategies.

"We certainly need to enrich our product portfolio [in the U.S.]," said VW finance chief Hans-Dieter Pötsch. "We need models which are more specifically tailored to North America, with a more competitive cost base, and we are doing that."