FRANKFURT, Germany - The Volkswagen diesel scandal could prove to be little more than a speed bump as far as car sales for the company are concerned, at least according to figures released Thursday.
Sales and profit rebounded in the second quarter for the core Volkswagen brand, compared with a dismal first quarter. With a combination of cost cutting and marketing, the German carmaker appears to have contained some of the damage to its image.
Although operating profit for the Volkswagen brand fell 12 percent in the quarter, compared with the same period a year earlier - to 808 million euros (about $889 million) - that was a drastic improvement over the first quarter, when the division barely broke even. Sales also improved.
Progress on cost cutting, if it continues, would be reassuring to Volkswagen investors, who have suffered a 25 percent drop in the share price since the company admitted in September that it had manipulated diesel vehicles to make pollution levels seem lower than they were.
Well before the deception, Volkswagen was making only a slim profit margin on cars with the Volkswagen brand because production costs were high compared with competitors like Toyota. Most of the parent company's profit has come from its Audi and Porsche luxury brands.
The cost of the scandal has still been a major burden on earnings. Net profit for the company as a whole fell by more than half to 1.2 billion euros in the second quarter. The decline was mostly the result of additional money that Volkswagen set aside to cover legal problems.
The carmaker said last week that it would subtract 2.2 billion euros from operating profit for legal issues. On Thursday, the company said the sum included the cost of recalling cars equipped with defective Takata airbags, as well as fines from Volkswagen's involvement in a scheme with other truck makers to fix prices.
"We produced a solid result in difficult conditions," Frank Witter, Volkswagen's chief financial officer, said in a statement. "But it will require continued hard work to absorb the significant impact from the diesel issue."