Volkswagen targets strong 2017 even as core brand struggles

← Homepage

WOLFSBURG, Germany Volkswagen (VOWG_p. DE) said it was capable of shouldering the costs of its emissions crisis and was targeting an even better year than in 2016 but warned that its core autos division continued to struggle."We see good chances of being able to ride the wave of the positive performance last year", when VW turned in record underlying profit, helped by sales of upmarket Audis and Porsches, Chief Executive Matthias Mueller said on Tuesday at the carmaker's annual news conference.

VW expects group revenue to exceed last year's record 217 billion euros ($231 billion) by as much as 4 percent this year and is forecasting an underlying operating margin of between 6 and 7 percent, compared with 6.7 percent in 2016, it said, affirming a forecast given on Feb. 24. The company also aims to moderately exceed last year's record 10.3 million deliveries.

"You can rest assured that we will do everything in our power to make 2017 an even better year than 2016," the CEO said.

But VW appears to be making slow progress in tackling the biggest trouble spot within the 12-brand group, the long-planned turnaround of its core autos division. Operating profit of the namesake brand slipped further to 1.87 billion euros in 2016 from 2.10 billion a year earlier because of higher marketing costs related to dieselgate and plunging demand in Brazil and other key markets, finance chief Frank Witter said.