Volkswagen Forecast Increase in Profit and Sales for This Year

By: Natalie Anderson

In the news: Europe's largest automaker and producer of the popular has announced recently its company forecast for this year saying that it will gain significant increase in terms of profit and sales especially since two of its subsidiary brand models are showing outstanding sales performance. The two brand models that Volkswagen is referring to are its Skoda Fabia and Audi A5. VW has also attributed its expected profit increase to the corporate overhauling that it is implementing which has significantly reduced its production costs.

Volkswagen new CEO Martin Winterkorn has announced during the company's annual conference that the company will gain profit before interest, taxes and one-time items to be higher than the 4.4 billion euros or $5.78 billion profit it has obtained last year. He also added that the company is showing promising sales results with its first two months recording an increase of 8.3 percent to 862,000 vehicles. He said that it is not impossible for the company to meet its goal of increasing its 2008 pretax profit to 5.1 billion compared to the 1.1 billion euros that the company obtained in 2004 which happened to be the target set by former VW CEO Bernd Pischetsrieder.

It is no secret that it was through the efforts of VW Chairman Ferdinand Piech and Martin Winterkorn former Audi boss and favorite protege of Piech that Pistchetsrieder was ousted as CEO of VW last January 1.

Last month, Volkswagen has reported that its income has more than doubled reaching 2.75 billion euros which the automaker attributed to the launching of their new models plus the disposal of its Europcar vehicle-rental unit and of course to the pre-tax that the company has obtained. The total revenue of the German-based automaker has increased by 12 percent to 104.9 billion euros.

Volkswagen has also reported its fourth quarter results and announced that it has obtained a more than tripled income reaching 1.54 billion euros compared to the previous 435 million euros in 2005. The increase was 11 percent to 27.8 billion euros.

To make sure that the automaker continuously increased its profit and sales, the Audi team which Winterkorn has brought with him, headed by Walter de Silva has been working on the new version of Volkswagen's Golf hatchback which is currently the best-selling vehicle of VW. Aside from the Golf hatchback, the team is also working in improving the Scirocco sports hatchback and the new compact sport utility vehicle, the Tiguan.

According to CEO Winterkorn, 'We will continue to work intensely on productivity and quality. We want to further increase the brand's passion for building cars." Europe's largest is counting on its new models to boost its sales especially in the US to cover the loss that the automaker obtained for its North American sales which reached a total of 866 million euros in 2005.

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