VW's Audi grapples with stagnant profit as crisis kicks in

INGOLSTADT, Germany, March 12 Tue Mar 12, 2013 5:08am EDT

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INGOLSTADT, Germany, March 12 (Reuters) - Volkswagen's Audi is grappling with stagnant earnings as the world's second-largest luxury car maker feels the impact of slumping auto demand in core European markets.

Operating profit at Audi edged up 0.6 percent last year to 5.38 billion euros ($7.00 billion) while net profit fell 2 percent to 4.35 billion, the Ingolstadt-based manufacturer said on Tuesday.

"Overall development in Western Europe was recessive and economic output contracted," Finance Chief Axel Strotbek said at the car maker's annual press conference.

Still, Audi stood by a goal to beat last year's record 1.46 million vehicle sales in 2013 and increase deliveries to over 2 million by 2020 as the VW division aims to snatch the luxury-sales crown from German rival BMW that year.

Parent VW on Feb. 22 scaled back its forecast for another record year in 2013, saying the goal is now to match the record 11.5 billion euro ($15.21 billion) operating profit for 2012.

($1 = 0.7684 euros) (Reporting by Andreas Cremer)

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