VW scales back profit ambitions as crisis kicks in
By Andreas Cremer | February 23, 2013 5:00 AM EST
The German car company's sales have held up better than rivals such as Peugeot
VW's goal for 2013 is now to match the record 11.5 billion euro ($15.21 billion) operating profit for 2012 it reported in results published on Friday.
"We're not completely immune to the intense competition and the impact this has on business," VW said. "While we shall see positive effects from our attractive model range and strong market position, there will also be increasingly stiff competition in a challenging market environment."
VW is feeling the effects of the crisis in its home region after resisting most of last year's European slump, taking market share from rivals.
Sales of VW's main namesake brand, accounting for almost a third of group profit, plunged 12.3 percent in western Europe excluding Germany.
The group had previously targeted higher underlying earnings for 2013 due to an easing of start-up costs from an engineering revamp. The consolidation of sports-car maker Porsche, bought by VW last August, was also expected to fuel profits.
"The guidance (for 2013) is definitely on the conservative side, clearly below market expectations," said Frankfurt-based Equinet AG analyst Tim Schuldt.
Still, Wolfsburg-based VW is counting on a strong presence in overseas markets to shrug off effects of the European crisis. Both vehicle sales and revenue may exceed last year's record levels of 9.1 million and 192.7 billion euros respectively, the carmaker said.
The group's shares were down 6.2 percent by 1626 GMT. Analysts said the fall also reflected disappointment over VW's planned dividend of 3.56 euros per preference share, short of the 3.85 euros expected on average in a Reuters poll.
(Reporting by Andreas Cremer; Editing by Helen Massy-Beresford and Jane Merriman)