Volkswagen forecasts unchanged 2013 operating profit on Europe
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MUNICH (Bloomberg) -- Volkswagen Group forecast that its 2013 operating profit will match last year's level, as the shrinking auto market in Europe weighs on earnings.
VW is targeting earnings before interest and taxes in 2013 on the same level as the 11.5 billion euros ($15.2 billion) earned last year, VW said today in a statement.
"We expect that the Volkswagen Group will outperform the market as a whole in a challenging environment," VW said in the statement. "However, we are not completely immune to the intense competition and the impact this has on business."
VW is counting on growth in China and the United States, along with gains in the luxury-car segment with the Audi brand, to help offset declining demand in Europe, where competitors are posting losses amid a recession. Car registrations in the region last month were the least for a January since records began in 1990, following a drop to a 17-year low for all of 2012, according to the ACEA auto-industry association.
VW said it expects sales revenue and vehicle deliveries to rise this year. Revenue last year gained 21 percent to 193 billion euros as group worldwide deliveries, also including the Porsche, Skoda and Seat brands, jumped 11 percent to a record 9.07 million cars, sport-utility vehicles and vans.
Net income last year jumped 41 percent to 21.7 billion euros, pushed up by revaluations of VW's options and stake in Porsche. VW last year bought the 50.1 percent of the sports-car maker it didn't already own.
Slower growth
"We expect Volkswagen's operating result to grow further this year, but the pace of growth will for sure be lower" as the industrywide European car sales continue to shrink, Frank Biller, an analyst at LBBW, said before the figures were released. VW will be helped by Audi's sales in China, where the "appetite for premium vehicles remains strong."
VW's forecast is scaled back from a year-old prediction made in the automaker's annual report for growth in 2013 in operating profit.
Sales in 2012 were propelled by demand for a U.S. version of the Passat sedan, which VW began building in 2011 at a new plant in Chattanooga, Tennessee, and for Audi's Q3 SUV, which was introduced in October 2011.
VW put a revamped model of its best-selling Golf hatchback on sale in September. The company said in January that it's adding shifts at its main plant in Wolfsburg to build more of the car for the European market, and it will expand its factory in Puebla, Mexico, to include production of the Golf's next version in 2014.
New investment
VW has a target of overtaking Toyota Motor Corp. and General Motors Co. to become the world's biggest carmaker by 2018. VW outlined an investment program for its automotive division in November totaling 50.2 billion euros through 2015, shortening the calendar from the usual five years because of unpredictability in the European car market.
The spending includes 24.7 billion euros to develop new cars and trucks. VW's Chinese joint ventures, which aren't consolidated, will invest another 9.8 billion euros in the period.
VW stock has declined 3.3 percent this year, valuing the automaker at 75.1 billion euros. The company is scheduled to publish quarterly earnings, including figures by brand, on March 14.
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