The carmaker has reported that pre-tax profits fell to €3.2bn from €4.0bn for the previous year. Group sales revenue was down 3.4% on the prior-year figure, at €51.0 billion.

Commenting on the results, Matthias Müller, chairman of the Board of Management of Volkswagen Aktiengesellschaft, said: “In light of the wide range of challenges we are currently facing, we are satisfied overall with the start we have made to what will undoubtedly be a demanding fiscal year 2016. In the first quarter, we once again managed to limit the economic effects of the diesel issue and achieve respectable results under difficult conditions. This shows that, with its portfolio of strong brands and its good position in many global automotive markets, the Volkswagen Group sits on very robust foundations. We can build on these when we now work towards modernizing our Group and positioning it for the new world of mobility.”

Performance was mixed across the brands. Volkswagen Passenger Cars brand recorded a year-on-year decline in volumes and sales revenue in the first three months of the current fiscal year. As a result, its operating profit before special items fell to €73m (€514m), while its operating margin was 0.3% in the first quarter.

At €1.3bn (€1.4bn), Audi's operating profit before special items was almost on a level with the strong previous year. The group added that exchange rate effects and continuing high upfront expenditures for new products and technologies and for the expansion of the international production network had a negative impact on earnings.

Skoda saw operating profit rose by just over 30% to €315m (€242m) due to positive mix effects and lower material costs. Sales revenue rose significantly, and the operating margin grew to 9.3% (7.6%).

SEAT improved its operating profit to €54m (€33m) on the back of cost optimization measures. This corresponds to 2.6% (1.5%) growth in its operating margin.

Bentley's first quarter operating result declined year-on-year to EUR –54 (49) million, due to the decline in vehicle unit sales.

Porsche remained on a successful trajectory at the start of the current fiscal year. Operating profit was up further to EUR 895 (765) million and thus rose at a much faster pace than sales revenue, which increased noticeably due to significantly higher unit sales. Its operating margin was 16.6%(15.1%).

Volkswagen Financial Services increased its operating profit sharply to EUR 492 (403) million. Volume-related factors in particular had a positive impact.

Looking ahead, the group said it was reiterating its forecast for 2016 as a whole. Depending on economic conditions – particularly in South America and Russia – and exchange rate developments as well as against the backdrop of the diesel issue, the Board of Management expects 2016 sales revenue for the Volkswagen Group to be down by up to 5% on the prior-year figure. 

“2016 will be a transitional year for Volkswagen that will see us fundamentally realign the Group,” added Müller. “Nevertheless, we remain confident that our operating business will again record solid growth this year. The Group's robust financial strength and earnings power are key to our ability to take the necessary decisions calmly and diligently, and to resolve the strategic policies that will shape our future with the necessary determination.”