Volkswagen AG forecasts that operating profit this year will match last year’s level, as the shrinking auto market in Germany affects earnings.
Earnings before interest and taxes, which rose 2.1 percent to 11.5 billion euros in 2012, probably won’t increase this year, VW said today in a statement. “Volkswagen is not completely immune to the intense competition and the far-reaching crisis in key European markets. Furthermore, uncertainty in the economic environment continues,” Chief Executive Officer Martin Winterkorn said in the statement.
VW is relying on growth in China and the United States, as well as gains in the luxury-car segment with the Audi brand, to help offset declining demand in Europe. Car registrations on the continent last month were the lowest for a January since records began in 1990, and came after a drop to a 17-year low for all of 2012, according to data from the ACEA auto-industry association.
VW’s forecast today has been revised downward from a year-old prediction made in VW’s annual report for growth in 2013 in operating profit. Stagnant earnings this year would mark the first time since 2009 that VW’s annual operating profit hasn’t risen.
Volkswagen’s market share in Europe rose 1.6 percent last year to 24.8 percent.