Volkswagen sees record sales but warns on protectionism

FRANKFURT, Germany — Volkswagen said its net earnings rose 6.8 percent in the second quarter on record sales but warned that "growing protectionism" is a threat to the globally connected car industry.

The automaker based in Wolfsburg, Germany, said that profit rose to 3.31 billion ($3.85 billion) euros from 3.10 billion a year earlier, despite a charge of 1.6 billion euros for the company's diesel issues. Revenues rose 3.4 percent to 61.14 billion euros.

The operating profit margin on sales rose to 9.1 percent from 7.7 percent.

CEO Herbert Diess said that the company "cannot rest on its laurels" due to coming challenges such as new, tougher emissions certification for vehicles. Automakers are facing bottlenecks in testing and approval under the new European emissions standards, which require testing the cars in real driving conditions.

In September 2015 U.S. authorities caught Volkswagen using software that turned emission controls on during stand testing, and off during real driving. The company paid more than $25 billion in fines and settlements. In the wake of the Volkswagen scandal, it became clear other automakers' cars also emitted more pollution during real driving than reflected in the tests. That could result from loopholes that permitted manufacturers to turn down emissions controls in cold weather to avoid engine damage.

Diess also warned that "growing protectionism also poses major challenges for the globally integrated automotive industry." U.S. President Donald Trump has imposed new tariffs on steel, aluminum and Chinese goods. The Chinese retaliated with tariffs on autos from the U.S. Trump had threatened to impose tariffs on imported European cars but held off after talks with European Commission President Jean-Claude Juncker.

Volkswagen reported record sales volumes for the first six months of the year of 5.5 million vehicles, an increase of 7.1 percent. Last year, it contested the title of largest carmaker with the Renault-Nissan-Mitsubishi alliance by logging 10.7 million in unit sales. Renault-Nissan-Mitsubishi had 10.6 million but its top executive said that Volkswagen achieved the edge by counting trucks.