VW reported 2012 record operating income of 11.5 billion euro ($15 billion), getting closer to its dream of becoming the world’s biggest automaker by 2018.
VW managed to surpass GM which has an operating income of $7.9 billion and Toyota with its $11.1 billion for 2012. In 2007 when CEO Winterkorn set the growth targets, VW was anything but a world leader, with the disruptive round of job cuts, its brands barely breaking even and Toyota with a lead of more than $10 billion. Winterkorn promised to increase pretax profit margins to 8% from only 1.7% in 2006 and to make VW boost sales to more than 10 million units from 6.2 million in 2007.
“It’s been a master class in execution,” said Max Warburton, an analyst with Sanford C. Bernstein in Singapore. “Of course there are always elements of luck with corporate plans like this, but mostly they’ve just gone out and done what they said they wanted to do with good products and increasingly competitive prices.”
This year the race will get tighter with the currency fluctuations helping Toyota get back on the track. Analysts predict that Toyota will reach an operating profit of 1.7 trillion yen this year and 13.2 billion euro for VW. At the current exchange rates VW could have a 2013 profit of $17.3 billion and Toyota $17.9 billion.