|
VW upbeat on 2000 outlook
|
 |
March 23, 2000: 7:19 a.m. ET
German automaker sees double-digit profit growth, plans truck expansion
|
LONDON (CNNfn) - Volkswagen, Europe's largest automaker, on Thursday forecast double-digit earnings growth for 2000 and pledged to boost its truck business.
VW, which commanded a 17 percent share of the western European auto market last year through its own brand and the Audi, Seat and Skoda marques, posted a 26 percent drop in net profit in 1999.
VW Chairman Ferdinand Piëch reiterated earlier comments that earnings would recover this year, forecasting an increase of "well over" 10 percent from last year's 147 million marks ($72 million).
Piëch highlighted plans to expand the trucks division either through acquisition or internal growth, reinforcing speculation that has linked VW with a bid for Scania. The Swedish truck maker's takeover by local rival Volvo collapsed earlier this month after European antitrust officials raised objections on competition grounds.
Piëch also said VW, the owner of Lamborghini and Bentley, had no interest in adding to its luxury brands.
Analysts remain upbeat about VW's prospects, noting that its non-German subsidiaries are in far better shape than those of European rivals such as BMW (FBMW) and Renault (PRNO), whose earnings been hit by losses at their respective partners Rover and Nissan Motor.
"VW is plowing money into research, which bodes well for the future, to counter continued pricing pressure, a high cost base and successful new models from competitors such as Peugeot (PUG) and Renault," said Chase Manhattan in a note to clients. "To justify high prices and attract customers, VW needs to rejuvenate its model range."
 VW's Golf is Europe's best-selling car, but Chase noted that its design is "now several years old". Volkswagen (FVOW) shares were narrowly lower at  43.74 in mid-morning trading Thursday. The stock has lost almost half its value over the past year, in line with the weakness in other European auto stocks. Although European car sales rose to record numbers last year, earnings in the industry have been under pressure because of intense price competition and weak revenues in emerging markets. 
-- from staff and wire reports
|
|
|
|
|
|
Volkswagen
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
