Volkswagen's Audi has given an early indication of the costs of the "Dieselgate" scandal to the German carmaker. Audi said its operating profit fell 6.1 per cent to €4.84 billion on emissions-related costs of €228 million, combined with provisions for recalls of cars fitted with Takata air bags.

As the main contributor to parent VW’s earnings, Audi’s results provide some idea of the performance of the parent group, which last month postponed the release of its results until late next month because the financial effects of the affair remain unclear. VW already set aside €6.7 billion in provisions for costs of the recalls in the third quarter of last year.

Audi said that it expected to increase deliveries and revenue “moderately” to new records this year, from some 1.8 million cars and €58.4 billion respectively. The Ingolstadt-based car-maker admitted in November to using illicit emissions-control devices in about 85,000 3.0 litre diesel engines, and submitted proposals for technical fixes to US authorities in February. “Conditions were demanding, perhaps more demanding than we originally expected,” chief financial officer Axel Strotbek said.

The operating margin at Volkswagen’s luxury division fell to 8.3 per cent from 9.6 per cent, compared with 10 per cent at rival Mercedes-Benz, which last year eclipsed Audi in sales for the first time since 2010. – (Reuters)