Volkswagen Group made a prediction that its operating profit for 2013 will match the level reached last year as the declining European auto market makes an impact on earnings. VW released a statement to say that it aims to achieve earnings before interest and taxes in 2013 on the same earnings level as the 11.5 billion euros ($15.2 billion) attained the past year.
Volkswagen Group is confident that it will outperform the market as whole despite the challenges it faces. But then, it recognizes that it isn’t totally protected from the heavy rivalry in this business. VW is depending on the growth in China and the U.S., together with gains in the luxury-car segment with the Audi brand, to contribute in the offsetting of the weakening European demand.
Its rivals have reported losses during this recession. January’s car registrations were the lowest for the first month of the year since 1990, after experiencing a decline to a 17-year low for the entire 2012, according to auto-industry association ACEA.
VW expects that sales revenue and auto deliveries will continue to increase this year. Revenue in 2012 increased by 21% to 193 billion euros as group worldwide deliveries, which Porsche, Skoda and Seat, increased by 11% to a record 9.07 million cars, sport-utility vehicles and vans.
Before the figures were disclosed, Frank Biller, an analyst at LBBW, said that Volkswagen’s operating results will increase further this year; however, the growth rate will be lower as the industrywide European car sales continue to fall.
VW will benefit from Audi sales in China, where the demand for premium vehicles has stayed strong. VW’s prediction has been scaled back from a year-old forecast made in its annual report for an increase in operating profit for 2013.