* Two-month sales up 4.7 pct at 1.47 mln vehicles
* Operating profit broadly flat since 2011 but sales surge
* VW counts on modular platform to boost margins
* Over 100 new models, facelifts may boost sales further
By Andreas Cremer
BERLIN, March 13 German automaker Volkswagen
will reinforce steps to boost earnings in coming
years as its long-planned target to increase sales to over 10
million cars a year is almost met.
Group sales were up 4.7 percent in the first two months of
2014 at 1.47 million autos, excluding heavy trucks, making it
likely VW will reach its 10 million goal outlined in 2007 this
year, four years earlier than originally planned, Chief
Executive Martin Winterkorn said.
But operating profit at the multi-brand group edged up only
3.5 percent in the past three years to 11.7 billion euros
($16.27 billion) in 2013, held back by spending on technology
and models, while sales surged 24 percent to 197 million euros.
"We're now focusing more strongly on qualitative goals,"
Winterkorn said at VW's annual press conference. "More than ever
before, our objective is qualitative growth."
Wolfsburg-based VW has used resilient profits to boost
investment during a European recession that plunged French and
Italian peers into the red.
But generating cash to fund global expansion is getting
harder as VW balances rising short-term costs, such as 4.6
billion euros in 2013 negative currency effects, with upgrades
and additions to a fleet of more than 310 models.
The push for greater efficiency at Europe's largest
automotive group echoes a call by the CEO last month on senior
managers to keep costs down at VW as the company prepares for
another year of tough market conditions.
VW toned down its guidance for 2014 operating profit on Feb.
21, saying EBIT may only improve if economic conditions,
especially in Europe where VW sells about 40 percent of its
vehicles, improve more than expected.
To boost margins, the carmaker is increasingly counting on
the gradual adoption of its new MQB modular platform for a wide
range of cars.
VW is working to cut production costs and shorten assembly
times across its various ranges of small and medium-sized
vehicles by basing them all on the new MQB single modular
platform, which standardises production and shares a greater
number of parts.
VW said last October it expects to save about 1 billion
euros ($1.39 billion) in production costs this year as the
number of cars built on the MQB platform may almost double to 2
million in 2014 and rise to 4 million by 2016.
Europe's largest automotive group last year eclipsed General
Motors to become the world's second-biggest car maker
behind Toyota, increasing sales of passenger cars, vans
and heavy trucks 4.9 percent to a record 9.73 million vehicles.
Winterkorn said greater "earnings quality" will also be
achieved by deepening cooperation with Porsche, which VW took
over in 2012, and moves to integrate truckmakers MAN SE
Integration of Porsche, which accounts for over a fifth of
group profit, may yield over 1 billion euros per year in savings
from joint purchasing and development, Winterkorn said. Aligning
MAN and Scania may reap at least 650 million euros of savings,
though it may take at least 10 years to achieve the full
VW said deliveries are poised for further growth next year
as the carmaker plans to launch over 100 new models and
facelifts in 2014 and 2015.
"Of course we're not ticking off the subject of volume
growth," the CEO said. "We will further increase our