Volkswagen profit tumbles as sales fall

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Volkswagen profit has tumbled 20% in the first three months of 2016 as it continues to grapple with the diesel emissions scandal.

Pre-tax profit fell to €3.2bn (£2.4bn) in the first quarter, down from €3.97bn in the same period a year ago.

Chief executive Matthias Mueller said he was “satisfied” with the start of “what will undoubtedly be a demanding” 2016.

VW admitted last year that it installed software to cheat US emissions tests.

It has already set aside more than €16bn to pay for costs arising from the scandal.

The German giant has agreed a deal with the US Department of Justice in which it will buy back and “substantially” compensate more than 500,000 American owners of its diesel cars affected by the emissions cheating.

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

Group sales revenue fell 3.4% to €51bn in the period.

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