Volkswagen profit slumps in Q1

Net profit of German carmaker Volkswagen slumped in the first quarter of 2016, said the company on Tuesday, insisting that the overall performance at the year start was in line with its expectation.

Net profit of Volkswagen Group fell to 2.3 billion euros (about 2.6 billion U.S. dollars) in the first quarter from 2.9 billion euros in the same period of previous year, the German auto giant said. Its sales also declined by 3.4 percent to 51 billion euros.

The group, which owns 12 brands including Volkswagen, Audi and Porsche, reported its first loss in over 20 years last year when it admitted to installing illegal software in 11 million diesel vehicles to cheat emissions tests.

The carmaker has set aside more than 16 billion euros to pay costs related to the scandal.

"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," said Volkswagen chief executive Matthias Mueller in a statement.

"In the first quarter, we once again managed to limit the economic effects of the diesel issue and achieve respectable results under difficult conditions," he added.

The group maintained its expectation that sales revenue in 2016 would be down by up to 5 percent year on year.

"2016 will be a transitional year for Volkswagen that will see us fundamentally realign the Group," Mueller said. Endit