Audi's Q1 operating profit falls 29% on sales drop

Volkswagen AG's Audi AG luxury division said first-quarter earnings fell 29 percent as the global recession caused deliveries of the TT sports car and Q7 sport-utility vehicle to drop.

Operating profit declined to 363 million euros ($478.1 million) from 514 million euros a year earlier, Ingolstadt, Germany-based Audi said in a statement today. Revenue fell 19 percent to 6.7 billion euros.

European car-industry sales fell 17 percent in the first quarter, the region's main trade group said April 16. Worldwide production of light cars and trucks may drop 20 percent this year, according to CSM Worldwide Inc. consulting company. Audi reiterated today that it's aiming for sales to decline less steeply than its main markets contract.

"The ongoing productivity and process improvements, as well as systematic cost management measures, have once again been considerably intensified in view of the ongoing crisis on global car markets," Audi said.

Volkswagen fell as much as 5.65 euros, or 2.4 percent, to 231.25 euros as of 10:36 a.m. in Frankfurt trading. The stock has declined 7.5 percent this year, valuing the Wolfsburg, Germany-based manufacturer at 73.5 billion euros.

Audi-brand deliveries fell 16 percent in the quarter to 210,027 vehicles, with sales of the TT falling 40 percent and the Q7 dropping 50 percent, the company said. Demand for the A4 car and variants, Audi's best-selling model, fell 17 percent and sales of the A3 compact declined 22 percent. Lamborghini sports- car sales fell 37 percent.

Volkswagen, Europe's biggest carmaker, said on April 22 that first-quarter group net income fell 74 percent on an 11 percent decline in sales. The company releases detailed figures for the period on April 29.