Volkswagen expects a very demanding year due to the European debt crisis

Article by Christian A., on April 20, 2012

Because of the European debt crisis, Volkswagen has a “very demanding year" ahead of it as the growth in global economy and auto markets slow down, according to CEO Martin Winterkorn. Nevertheless, VW is “cautiously optimistic” for 2012 even with the economic uncertainties. Winterkorn talked to reporters last Thursday at the automaker's annual meeting.

He added that VW continues to aim for a boost in auto sales and revenue to be higher than 2011 results. The car markets in Asia, the U.S., Latin America and Russia had been growing. Meanwhile, VW achieved a 15% increase in group sales last year to a record-breaking 8.36 million cars.

In the first quarter worldwide, VW sold 2.2 million units. Winterkorn restated VW’s aim to match the record operating profit last year of 11.3 billion euros ($14.8 billion).

Aiming for bigger earnings this year may be obstructed by the costs for a technology overhaul meant to facilitate the construction of up to 3.5 million small and mid-sized cars. VW seeks to roll out over 40 new models or updated vehicles.

Winterkorn said that there are several hurdles that have to be resolved before it could combine with Porsche SE's automotive operations. Last September, VW scrapped plans to fully merge with Porsche as lawsuits against it in the U.S. and in Germany made Porsche’s valuation difficult.

VW would be getting a tax burden of around 1 billion euros if it would use its options to acquire the 50.1% of Porsche's core business that remain before 2014. Winterkorn expressed confidence that the integrated Volkswagen and Porsche group “will happen.” [source: Autonews]

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