April 28 news story from the
Detroit News:
Volkswagen AG, Europe's biggest automaker, aims to offset plunging European demand this year by rolling out 60 new and updated models, including luxury cruisers like the Bentley Flying Spur.
"The European debt crisis remains a source of far-reaching turmoil," Chief Executive Officer Martin Winterkorn said. "Regardless of whether we are in an upturn or a downturn, our goal is to ensure the Volkswagen group reaches the top of the automotive industry."
VW is targeting higher auto sales and revenue this year as the revamped Golf, an updated Skoda Octavia and a new Audi A3 sedan help make up for a slowdown in Europe, where demand is heading to a 20-year low. Maintaining growth momentum is key for the company, which aims to overtake General Motors Co. and Toyota Motor Corp. by 2018 to become the world's largest automaker.
"Volkswagen will continue to do better than the market," said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt. "March was relatively weak, but with rising Golf sales the group should perform better."
The manufacturer's growth all but stalled last month as sales edged up 0.2 percent to 864,400 cars, restraining the first-quarter advance to 5.1 percent as sales in its home German market tumbled 17 percent.
To further dilute its exposure to Europe's car market, the company will open 1,500 sales outlets in growth regions in the medium term, adding to its network of 20,000 dealers around the world, Winterkorn said.
Volkswagen is pinning its hopes for keeping up sales volumes on new models, such as the seventh generation of its best-selling Golf compact, introduced at the end of last year. The Audi premium brand, VW's largest earnings contributor, has been rolling out the revamped A3 hatchback and will add a sedan version of the model later this year to lure American and Chinese buyers seeking a small car with a separate trunk.
Luxury brands account for more than half of VW's earnings and the presence in this market segment will expand.
"The Volkswagen group's unparalleled know-how and strength in the premium segment is — quite literally — paying off," said Winterkorn. "We will further extend our excellent position in this highly profitable business."
Porsche will add the Macan compact sport utility vehicle at the beginning of next year and development of an ultra-luxury SUV for the British Bentley unit is "well under way," he said.
The Czech Skoda brand will double its lineup in China to six models, including the new Rapid compact sedan, which was unveiled at the Shanghai auto show last weekend. The Spanish Seat unit, VW's only money-losing brand, is rolling out a revamped version of the Leon hatchback in a bid to spice up its image and return to profit.
VW's presence in China, Brazil and Russia has enabled it to steer through the European industry gloom better than mass-market rivals PSA Peugeot Citroen, Europe's second-largest carmaker, and Renault SA. Peugeot is eliminating jobs and closing a factory to end losses as the region's auto market shows no signs of a rebound.
VW reported that first-quarter operating profit fell 26 percent to 2.34 billion euros, matching the average estimate of five analysts surveyed by Bloomberg. The carmaker stuck to a goal for full-year operating profit to be on the same level as 2012.
VW's revenue declined 1.6 percent in the first quarter revenue. That compares with a 6.5 percent drop at Peugeot and a 12 percent plunge at Renault. Peugeot said additional cost savings may be necessary next year if the market doesn't improve.
Winterkorn said European markets will remain "extremely weak for the foreseeable future."
VW has ramped up investments to boost its manufacturing footprint outside Europe and roll out a new modular technology to speed up development and production of new vehicles.
It has seven new Chinese plants in various stages of planning, part of $19 billion in investments in production outside Europe expected by 2017. After spending $1 billion on a factory in Chattanooga, Tenn., the company may further increase U.S. capacity with production of a sport utility vehicle based on the Crossblue concept.
From The Detroit News: http://www.detroitnews.com/article/20130428/AUTO0104/304280308#ixzz2Rl8a7nEr
