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Emissions scandal forces VW’s Audi H1 operating profit down by 18%

Volkswagen’s luxury division Audi said on Friday it had missed its profitability this year as costs for diesel emissions scandal and possible recalls of cars fitted with Takata Corp airbags weighed on results.

A statement by the company in Wolfsburg said the first-half operating profit at Audi plunged 18 per cent to 2.4 billion euros ($2.66 billion).

Audi, the main contributor to VW group profit, added that 165 million euros had been set aside in the second quarter for its emissions scandal and effects of potentially faulty Takata airbags.

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It said that the amount had raised funds set aside for both issues since last year to 563 million euros.

“To preserve our innovation and investment course, we will raise efficiency in all parts of the company,” the firm’s finance chief, Axel Strotbek, said.

The relapse on profitability coincides with a strategic overhaul at Audi which plans to increase spending on electric cars, digital services and autonomous driving in coming years.

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The overhaul is part of VW’s post-dieselgate shift of business priorities.

But Audi, which slipped behind Daimler’s Mercedes-Benz last year into third place among the top-selling luxury car brands, said it still counted on more than 20 all-new or redesigned models this year.

Audi said that the aim was to beat the 2015 record of 1.8 million auto sales.

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