Volkswagen AG will launch 20 new models or derivatives this year, including the Golf V, but chairman Bernd Pischetsrieder has warned the company won’t match last year’s R34-billion operating profit.

Volkswagen AG will launch 20 new models or derivatives this year, including the Golf V, but chairman Bernd Pischetsrieder has warned the company won’t match last year’s R34-billion operating profit.

Volkswagen's operating profit last year was the group's second best ever, but Pischetsrieder said "due to profound changes and considerable uncertainty in the economic and political framework, results for the first quarter of 2003 will be significantly lower" than the first three months of the previous year.

"With so many new models in the pipeline to succeed an aging model lineup, we are at the low end of our cycle," a senior VW marketing manager told . "We really have to fight ourselves through this year."

Volkswagen recently admitted to recent problems in securing sales in overseas markets, notably the United States, Europe and Asia-Pacific.

"Due to the vagaries in the markets to which our Golf and Polo products are exported, there has been a decline in exports in the first quarter of this year as opposed to the same period last year," a Volkswagen South Africa spokesman said last week.

"We do, however, expect that for the total year, the export of fully built cars will remain constant around 30 000 units or even grow slightly," he added.

"Generally lower car markets, lower unit volumes, currency fluctuations and pricing pressures will take a toll on Volkswagen," a London-based marketing analyst said. "If the euro gets stronger, that might affect VW's full year results negatively… Our internal forecast for VW's 2003 pre-tax profit is R27,6 billion."

However, Volkswagen expects substantial sales growth this year in China and Pischetsrieder projected that total unit sales would again top five million.

VW will absorb the bulk of the costs of launching a new-generation Golf this year. "But that car won't contribute to this year's results before the fourth quarter," the analyst said.

Pischetsrieder said VW would cut capital spending by 10 per cent this year because of expected lower sales and a corporate strategy of limiting investments to seven per cent of revenue.

Original article from Car