Porsche sees profits drop after VW diesel emissions scandal

German luxury carmaker Porsche has seen its profits cut by more than half as a result of its shareholding in Volkswagen, which is embroiled in a worldwide diesel emissions scandal.

Porsche, which owns just under a third of Volkswagen’s shares, said its net profit slumped to €1.2bn from €2.5bn, due to costs the affair has rung up so far.

Porsche said its profits from investments in its fellow German carmaker were “negatively impacted” due to “expenses incurred at the level of the Volkswagen group in connection with the diesel emissions issue”.

Last month Volkswagen admitted installing software designed to cheat diesel emissions tests in 11 million vehicles worldwide, including almost 1.2 million in the UK.

Volkswagen has launched an investigation and appointed a new chief executive and chairman in the wake of the scandal.

The carmaker is setting aside funds as it recalls cars and prepares to fight court cases against shareholders and customers.

Porsche now says due to these extra costs its full-year profit will range between €800m and €1.8bn.

The sports car manufacturer had previously given group profit for the year at between €2.8bn and €3.8bn.

Despite the scandal, Porsche sales have proved resilient rising 27.6% to 173,085 cars over the nine-month period.

Last month scandal-hit Volkswagen posted a third-quarter loss of €3.5bn.

The Volkswagen said it would have made a profit of €3.2bn if the ”diesel issue” had not emerged.

Volkswagen said it has set aside €6.7bn relating to its emissions software controversy.

In the UK, VW is preparing to recall and ”correct” almost 1.2m vehicles. These consist of around 508,000 Volkswagen cars, 390,000 Audis, 132,000 Skodas, 80,000 VW commercial vehicles and 77,000 Seats.