Volkswagen Earnings Review: Profits Surge On High Premium Sales; Namesake Brand Still Struggling

What stood out in the earnings release was the strong rise in operating profits for the automaker, pushing automotive margins to 6%, up from 5.6% in 2013, despite another weak performance from the namesake passenger vehicle brand. A 20% fall in vehicle sales in South America, weak demand for commercial vehicles, and continually low profits for the own-branded passenger vehicle brand, weighed on Volkswagen?s financials. Going forward, the company remains committed to improving its operating performance, a lot of which depends on the namesake passenger cars division, which wrapped up 2014 with only 2.5% operating return on sales, compared to 2.9% for the previous year.