VW Net Profit in ’89 Hits Record of $620 Million

Volkswagen AG, Europe’s largest car maker, said today its 1989 group net profit surged 33% to $620 million in its most successful year ever.

The strong rise in earnings was due to higher sales, the effect of a two-year cost-cutting program and higher productivity, VW said in its annual report.

VW earnings continued to rise in the first quarter of this year as group net profit rose $6 million, VW Finance Director Dieter Ullsperger told reporters.

But 1990’s outlook is clouded by a drop in earnings from VW’s Brazilian subsidiary, which has been hit by a government belt-tightening program. U.S. auto makers with operations in Brazil have reported similar woes.

But brisk business in Europe made up for VW’s lower sales in Brazil in the first quarter of this year.