VW Financial Services contributed €353m (£290m) to the operating profits of the Volkswagen Group as the company posted first quarter 2014 profits of €2.9bn (£2.38bn), up 21.8% or €0.5bn on last year.

The figures contained within the quarterly interim report came off the back of an increase in global sales of 5.8% and an increase in sales revenue over the first three months of the year of 2.7% to €47.8bn.

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The figures, which exclude the Chinese joint ventures with SAIC and FAW, helped take the manufacturer to a pre-tax profit of €3.4bn, up from €2.7bn the year before, and after tax the company made €2.5bn, a 31% increase on the same period last year

Dr Martin Winterkorn, chairman of the board at Volkswagen said: "The Volkswagen Group has established a strong position in recent years. Our good start to the current fiscal year is an additional proof of this. We must now continue improving our position and maintain our successful course as part of the systematic implementation of our Strategy 2018"

Also within the report, the financial services division saw a reduction in liquidity over the quarter as the capital requirements rose.

All but one of the group’s manufacturing divisions reported an increase in profit with Škoda posting an increase of 65.2% to €185m and Bentley increasing profits by 65.7% to €45m.

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Seat remained in the red but increased profitability to post an operating loss of €36 million for the quarter versus €46m for the previous year.

The outlook at the VW Group looked good according to the report, with the Financial Services division expected to make a return on sales of between 8% and 9% for 2014 and an expected a return on sales for the rest of the group of between 5.5% and 7.5%. The Group also expects sales revenue to be around 3% of the previous year’s results.