Report Says Volkswagen Might Miss Profit Targets image

In a recent report the Manager Magazin said that VW, the largest automaker in Europe, might not be able to meet its profit goals as sales growth slows and costs increase.

VW dropped 3.3% after Manager Magazin published the report, which is 6.05 euro to 175 euro. CEO Hans Dieter Poetsch is worried that the automaker will not meet target for 2015 and struggles to reduce costs by around 1,000 euro per vehicles, according to the magazine.

“The suggestion that Volkswagen isn’t committed to its targets is false,” the Wolfsburg-based carmaker said in an e-mailed statement. “Volkswagen completely stands behind its statements about the future development of the company.”

VW plans to make investments of 50.2 billion in its automotive division by 2015 in order to surpass Toyota and GM and become the largest automaker in the world by 2018. Poetsch said earlier this month that the German automaker is forecast to increase its operating margin from 3.5% in 2012 to more than 6%.

Seat, which last year reported a 156 million euro loss, has a target margin of 5%, while Skoda expects margin of between 6% and 8%, after reporting 6.8% last year.

Source: Bloomberg