BERLIN (Bloomberg) -- Volkswagen AG, Europe's biggest automaker, passed rival Ford Motor Co. in the auto industry earnings race last year on surging demand in China.
Net income surged sevenfold to 6.84 billion euros ($9.42 billion), the Wolfsburg-based company said Feb. 25. Ford posted 2010 profit of $6.56 billion, while General Motors Co. reported $4.7 billion. Toyota Motor Corp. forecasts 490 billion yen ($6 billion) in profit in the year ending March 31.
Volkswagen aims to surpass Toyota, the world's largest carmaker, in sales and profitability by 2018 on growth in Brazil, Russia, India and China. VW forecasts deliveries will grow 5 percent this year after reporting a record 7.2 million deliveries of cars and SUVs in 2010. Sales in China, VW's biggest market, advanced 37 percent last year to 1.92 million on the Lavida sedan and Golf hatchback.
Net income beat the 4.96 billion-euro average estimate of six analysts surveyed by Bloomberg. Revenue rose 21 percent to 126.8 billion euros. Earnings before interest and taxes in 2010 advanced to a record 7.14 billion euros, up from 1.85 billion euros in 2009. VW proposed a 2010 dividend of 2.20 euros per common share and 2.26 euros per preferred share.
VW, the first overseas carmaker to enter China three decades ago, is planning to add two plants and double production to 3 million cars annually. The manufacturer, which also owns the Audi, Skoda and Lamborghini brands, currently has nine Chinese factories.
Tight component supplies stemming from partsmakers' struggle to keep up with vehicle demand caused VW to halt production at its main Wolfsburg factory on Jan. 31 and a plant in Emden. The Audi luxury division announced plans yesterday to add 2,000 workers as it struggles to keep up with record sales.
"We expect the group's revenue and operating profit in 2011 to be higher than the previous year," VW said in the statement. "However, the continuing volatility in interest and exchange rate trends and commodities prices will weaken the positive volume effect."
VW said in November it will invest 51.6 billion euros through 2015 on plants, vehicles and developing the carmaker's nine brands worldwide. Spending doesn't include China, the manufacturer's biggest market, where VW's joint ventures will invest another 10.6 billion euros.