VW expects profits to be cut in half

Europe’s largest carmaker Volkswagen has said it faces the prospect of profits being halved this year.

VW blamed the strong euro currency and heavy restructuring costs in Brazil - including 4,000 redundancies - as it slashed third quarter earnings.

Currency fluctuations alone had cost the company €1.2bn over the first nine months of the year.

Operating profits for the three months to the end of September has fallen by 56% to €510m although sales were marginally up on the same period last year.

According to VW chief executive, Bernd Pischetsrieder : “My management team are now under pressure to deliver in the first quarter of next year."

Analysts have stated that costs have now reached a peak and that VW’s operating business would stabilize over the coming months.