VW aims to match last year’s record profit for 2012, CEO Winterkorn says

Article by Christian Andrei, on March 12, 2012

For this year, Volkswagen AG is aiming to be at par with the high level of profit it achieved in 2011, CEO Martin Winterkorn disclosed. The company is betting on the new generations of VW Golf and Audi A3 to help counteract the softer demand in the European region. Winterkorn said they "remain cautiously optimistic" for the next months "despite all the uncertainties."

Volkswagen will launch 40 new and enhanced models in 2012, offsetting the expected drop in western European vehicle demand. The automaker intends to boost the operating profit in 2013, according to its annual report. VW, which is the biggest carmaker in the European region, continues to work on a merger with the vehicle manufacturing operation of Porsche Automobil Holding SE. In 2011, the automaker posted record profit with earnings before interest and taxes increasing 59% to 11.3 billion euros or $14.8 billion.

Aside from the weaker demand in Europe, the automaker also has to deal with extra costs from the launch of a next-generation Golf hatchback with a technology, which will also be used on Seat, Skoda and Audi models.

The automaker is aiming to outperform General Motors Co. as the largest vehicle manufacturer in the world by 2018. It also aims to outpace the "low single-digit" growth rate in the worldwide vehicle market in 2012, according to sales boss Christian Klingler in a statement last week at the Geneva Motor Show.

Last year, the automaker sold a record 8.27 million automobiles. It has expanded its SUV production like the Audi Q5 and VW Tiguan to meet demand in China, which is its biggest market, and in the United States.

The preferred shares of Volkswagen have increased 21% in the past 12 months, valuing the company at 62.7 billion euros and bringing it to third in rank in terms of the best performer on the 14-member Euro Stoxx autos and parts index. Volkswagen increased the dividend by 35 percent for 2011 to 3.06 euros per preferred share from 2.26 euros a year ago. The dividend per common share for 2011 will be 3 euros.

Topics: vw, profit, ceo

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