The past few years have been record-setters for the U.S. auto market, as well as emerging markets such as China, India and Brazil. But European new car sales are at their lowest point in about the last 20 years, with January 2013 new vehicle registrations at an all-time low since data started to be compiled in 1990. Despite strong sales in the U.S. and China, Volkswagen is cutting its 2013 profit forecast on continued weakness in the European market, reports Bloomberg.
Volkswagen CEO Martin Winterkorn said in a statement the company “is not immune to the intense competition and the far-reaching crisis in European markets.” The company is counting on strong sales in the United States and China to help make up for weakness in Europe. January European new car registrations were at their lowest point since 1990, when records were first compiled. January 2012 European registrations were a 17-year low.
Despite the cautious profit outlook, Volkswagen is planning to increase its stock dividend, and still is aiming to become the world’s largest automaker by sales volume by 2018, surpassing General Motors and Toyota. However, the terms for Volkswagen executive compensation have been revised to cap bonuses, with a new requirement that the company earn a minimum operating profit of 5 billion euros.