German giant Volkswagen AG’s said in a statement that its truck and bus division are predicting a big surge in profit this year on the back of upbeat sales in Europe and China as well as a minor recovery in Brazil.
Volkswagen also disclosed plans to offer a service for its customers and other partners which can digitally connect vehicles.
VW Truck & Bus just ended its first year as a separate company, grouping Volkswagen’s utility vehicles operations and truck-makers Scania and MAN. In its first year, the truck division made 1.3 billion Euros or $1.39 billion in pretax profit, a rise of 27% from the previous year. Revenue surged 4% to EUR21.3 billion from sales of around 184,000 cars.
Company’s CEO Mr. Andreas Renschler said he predicted a “significant rise” in earnings this year, after making a return on sales of around 6.1% last year, but failed to offer a specific profit and sales outlook. Looking ahead, VW Truck & Bus is aiming a pretax return on sales of around 9%.
Meanwhile the buoyant outlook depends on positive development in Brazil, he said, which has faced steep drops over the past few years.
“Brazil has been an important market for us for decades,” he told reporters in Munich. “We expect a slight recovery in Brazil in the second half of the year and a stronger rebound in 2018.”
Furthermore Company’s Chief Finance Officer Matthias Gruendler said that the truck division is aiming to inject about EUR420 million in Brazil over the next five years.
Moreover Volkswagen’s truck division also acquired a strategic stake in the U.S. truck maker Navistar International Corp. in 2016. Mr. Renschler said the collaboration with Navistar was on track, but gave no information on the developments.