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Volkswagen on course for profitable year

A logo is displayed on a sign in front of a Volkswagen dealership on March 28, 2011 in San Rafael, Calif.

Bob Moon: The third quarter of the year is typically the toughest for carmakers. It's a seasonal thing.

But not so at Volkswagen this year. Profits at the company that brought us the Bug, and then brought it back again, jumped 45 percent in the latest quarter over last year. Volkswagen is interested in more than earnings, though. It's after world domination. And, as Marketplace's Jennifer Collins reports, it has a tough road ahead.


Jennifer Collins: In an old Volkswagen commercial, a couple is driving a Jetta, and all of the sudden, the world around them just synchronizes.

Advertisement: Sometimes everything just comes together. On the road of life, there are passengers and there are drivers.

Volkswagen is a driver. The company is rapidly claiming more of the car market, especially in fast-growing economies like China.

Peter DeLorenzo was a marketing exec in the auto industry for over 20 years.

Peter DeLorenzo: Everyone expects Volkswagen will be the number one global automaker within six months.

Dan McGinn: Clearly, this is a great moment, a great time for Volkswagen. It's also a time fraught with risk.

Management consultant Dan McGinn says Volkswagen has become successful by building its brands; pardon me while I name drop -- Bentley, Bugatti, Lamborghini, Audi, and it's expected to close a deal with Porsche soon.

McGinn: But the challenge of these multiple brands is that it gets harder every year.

Harder, McGinn says, to keep up quality and sales. General Motors is now number one, but it wasn't too long ago the company famously collapsed under the weight of its brands. Toyota -- another former number one -- also over-expanded. DeLorenzo says Volkswagen is well positioned to hold on to the top spot.

DeLorenzo: They have all the ingredients, they have all the brands, they have all segments of the market covered.

But even Volkswagen admits business may take a turn. Today, the company said it expects sluggish sales in Europe and overall sales to be flat this year.

I'm Jennifer Collins for Marketplace.

About the author

Jennifer Collins is a reporter for the Marketplace portfolio of programs. She is based in Los Angeles, where she covers media, retail, the entertainment industry and the West Coast.

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