Volkswagen has raised its mid-term revenue outlook on demand for new sport-utility automobiles in emerging markets and upgraded a pretax revenue objective even as it pushes investments in electric cars and new innovations.
The automaker now expects group profits to surpass 2016’s record of 217 billion euros ($255.69 billion) by over a quarter by 2020, after stating in March it anticipated it to increase by more than a fifth.
“We have a somewhat more positive outlook now than in the spring,” group sales chief Fred Kappler stated on Monday.
However growing spending on electric vehicles, the first generation of which will be less lucrative, and consistent investment in combustion engines required by tightening up emissions rules has resulted VW to keep its operating profit guidance broadly the same, finance chief Frank Witter informed.
The automaker said group operating profit (EBIT) might increase by 25 percent or more by 2020 from the 7.1 billion euros reached in last year. In March, the automaker had expected group EBIT to surpass year-ago levels by 25 percent.
“Cost discipline, efficiency improvements and execution of one-time product launches are certainly important to reach our objectives,” CFO Witter said.
The automaker on Friday outlined plans to spend over 34 billion euros through 2022 on electric cars, autonomous driving and new mobility services as it looks to draw the line under its emissions scandal and become an international leader in zero-emission vehicles.
Group pretax profit is now seen rising by 30 percent or more by the end of the decade, Witter stated, pointing out an expected contribution of 3-3.5 billion euros from Chinese joint ventures. The company had anticipated an increase by 25 percent or more in March.