Volkswagen wows with record earnings, but European carmakers continue to struggleVolkswagen said this month its financial results in 2011 were the best in its storied history.

Though Volkswagen is based in Europe, the carmaker was easily able to sidestep the ongoing troubles plaguing the continent. The company said its net income more than doubled to roughly $20.6 billion last year, underscoring how the firm's commitment to strategic sourcing and supply chain management enabled it to bolster its operating margins.

Moreover, the company's full-year revenue also jumped by nearly 26 percent, hitting roughly $212 billion. The automaker's profits were bolstered by, among other factors, its Porsche brand and the effects of cost reduction measures implemented over the past few years. The company's earnings performance easily outpaced analysts' expectations.

Volkswagen also noted unit sales rose approximately 15 percent from 2010, underscoring its sustained pace of growth. The company sold 8.3 million vehicles in 2011, with its various brands – of which Audi and Porsche are included – reporting sales hikes. The unit sales, revenue and profit figures were all records for the venerable automaker.

Volkswagen is now the world's second-largest carmaker, rising a spot to sit just behind U.S.-based rival General Motors. Though Toyota had occupied the title for the past few years, the Japanese automaker's sales were significantly impacted by damage resulting from the 9.0-magnitude earthquake and subsequent tsunami that battered the island nation in March last year. GM sold 9.03 million vehicles in 2011, placing Volkswagen within striking distance of the company.

The New York Times reports that although Volkswagen may trail GM in total worldwide sales figures, the company is substantially more profitable than the American carmaker, which recently reported a full-year profit of $7.6 billion for its fiscal year. Though policy makers in Europe project the euro zone will experience a slight recession in 2012, analysts are still bullish on Volkswagen's growth prospects for the year, particularly after officials said sales climbed 1.3 percent in January from the year prior.

U.S. carmakers also reported better-than-expected financial results for the 2011 fiscal year, but their European counterparts were far less fortunate. French automaker Peugot recently said it had lost money, and officials from the company said they are mulling a number of business cost reduction initiatives as they work to boost profits. Renault, another French car manufacturer, is struggling to maintain its slim margin of profitability.
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