VW is betting it can beat last year's sales record with new products like the Audi A3.
Despite a sharp drop in its fourth-quarter earnings and the worsening situation in its European home market, Volkswagen AG today predicted it will see a substantial rise in sales and revenues for 2012 as it brings an array of new products to market.
But cost management will be critical because the maker admitted it is facing “increasingly stiff competition in a challenging market environment, especially in certain European countries.”
Buried amidst the maker’s overall financial data was word that VW would nearly double the pay for its various board members, to $93 million.
The German giant – which surged to second in global automotive unit sales last year, behind General Motors and ahead of Toyota – revealed that net earnings for the October – December quarter fell by nearly a third, to 2.16 billion Euros, or $2.8 billion, down from 3.2 million Euros the year before.
For the full year, however, VW more than doubled earnings, to 15.41 billion Euros. Revenues, were up 26%, meanwhile, to 159.34 billion. Revenues also rose for the fourth quarter, from 34.33 billion Euros to 43.06 billion.
The German maker has set a goal of achieving world dominance in the auto industry by the end of this decade. It missed the mark only slightly last year, its 2011 sales totaling 8.3 million vehicles, a 14.7% increase marking the first time the maker had ever exceeded 8 million. Some industry observers actually rank VW as king-of-the-hill as GM’s industry-topping 9.03 million-unit record includes vehicles marketed as part of various joint ventures – such as the microvans sold in a partnership with China’s SAIC and Wuling.
The various VWAG brands introduced a host of new products at this month’s Geneva Motor Show, including the new VW Golf Cabriolet and Audi’s next-generation A3. Those new products should deliver another increase in unit sales, the maker forecast today, though it declined to set a specific target.
But despite the higher goal for sales and revenues, VW officials indicated they will simply be aiming to match last year’s 11.27 billion Euro operating profit in 2012.
Though VW said it is facing stiff competition across the globe it indicated its biggest challenge will be in Europe where a number of countries are slipping back into recession while others are facing severe problems due to government spending cutbacks that could further curb consumer spending.
The German maker’s 2011 performance paid off handsomely for senior executives, especially VWAG CEO Martin Winterkorn. The executive took home a 17.46 million Euro paycheck last year, or $22.92 million. That was up from 9.33 million Euros in 2010, largely due to Winterkorn’s annual budget, which jumped from 4.8 million Euros to 11 million last year.