VW skids on rivals' newer cars
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VW banks on new Touareg to boost growth prospects
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FRANKFURT, Germany (CNN) -- Volkswagen, Europe's biggest carmaker, on Wednesday posted a decline in full-year pre-tax profit as it continued to lose ground to competitors.
The German company has been hurt by unemployment in its domestic market and weak demand in the United States because of its aging Golf and Passat models, which are losing out to newer cars from the likes of Peugeot (PCGE) and Ford (F).
Volkswagen -- which also makes the new Beetle and owns the luxury marques Audi, Lamborghini and Bentley -- is spending billions of euros on development and is hoping that new models like the Touareg, Touran and Audi A3 will pull in buyers.
Pre-tax profit fell 9.6 percent in 2002 to 3.986 billion euros ($4.26 billion), meeting the company's own target of about 4 billion euros. Analysts polled by Reuters had expected a figure of 3.963 billion euros.
The full-year figures imply a pre-tax profit of 1.012 billion euros in the fourth quarter, according to Reuters calculations, above analysts' expectations.
Sales slipped 1.8 percent to 86.9 billion euros.
Volkswagen's stock (FVOW), which has fallen by a third last year, slipped 0.5 percent to 36.20 euros in early Frankfurt trading on Wednesday.
Volkswagen is facing tough competition from French rivals PSA Peugeot Citroen and Renault. But Renualt Chairman Louis Schweitzer said he was banking on a 2 percent dip in the western European market in 2003, but that it could skid as much as 6 or 7 percent in a worst case scenario, with war in Iraq and a troubled German economy being major threats.
The targets came as carmakers battle a shaky car market, with motorists loathe to splash out on big-spend items as they count the potential economic cost of a looming war with Iraq.
Volkswagen gave no outlook but Chief Executive Bernd Pischetsrieder said in January he was confident about earnings and sales this year. The company aims to sell more than 5 million cars this year, after sales dipped 1.9 percent to 4.98 million in 2002.
