VW stays positive after massive fall in profits

German auto giant Volkswagen reported on Thursday a sharp fall in first-quarter net profits down to 4.7 billion euros ($5.2 billion) owing to an accounting effect, while both sales and revenue increased.

Net profit dropped 29.9 percent, with Volkswagen saying it was due to the effect of commodity hedging, which had pushed up operating profit in the period a year earlier.

Sales revenue rose 22 percent from January to March, boosted by improved sales in Europe and North America, said the group, which also confirmed its positive forecast for the year.

Deliveries of all types of vehicles were up 7.5 percent year-on-year.

"Based on this solid performance and an order book of 1.8 million vehicles at the end of Q1, we confirm our financial outlook for 2023," said Arno Antlitz, the group's chief financial officer.

However deliveries in China, a key market for Volkswagen, fell 14.5 percent as the group faces increasing competition from homegrown rivals.

But the Wolfsburg-based group, whose 10 brands include Audi, Seat and Skoda, said it was "confident" that an expanded model range and "China-specific technology" would help it recover throughout the year.

Compared to the first quarter of 2022, deliveries of fully electric vehicles climbed 42 percent, making up 7 percent of the group's total deliveries.

This is the same level for the whole of 2022, but still some distance from the 11 percent figure that Volkswagen is aiming for in 2023.