Volkswagen reportedly reiterated its financial targets on Wednesday but said major challenges lay ahead and stressed the need to cut its manufacturing costs in order to compete globally.
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“We do expect an improved operating and pretax profit (in 2005),” chief financial officer Hans Dieter Poetsch told an analysts’ conference in London, Reuters reported, noting that Poetsch repeated what VW had said in late July.
“Before too much fantasy sets in, you should be aware of the very real challenges we still have confronting us in the second half of the year,” Poetsch reportedly added.
“The examples are very obvious: the situation in the United States, the situation in China and the significant challenges with regard to the Volkswagen brand, which still is operating in a very unsatisfying situation.”
According to Reuters, chief executive Bernd Pischetsrieder said VW, dogged by a strong euro and weak US sales, will again lose money in North America this year and is unlikely to break even next year unless conditions unexpectedly improve.
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By GlobalDataProfits from its Chinese joint ventures have also evaporated amid intense competition, while the core Volkswagen brand made a first-half operating loss, Reuters noted.
Reuters said VW repeated that it aims to achieve an annual pre-tax profit of around €5.1 billion ($US6.24 billion) in 2008 thanks to a planned €4 billion gain as part of its “ForMotion Plus” efficiency programme.
