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Aging Golf hurts Volkswagen
FRANKFURT, Germany (CNN) -- Volkswagen said on Wednesday profit was almost halved in the third quarter of 2002 as Europe's biggest carmaker loses customers to competitors. The German company has been hurt by weak demand in its key markets in Europe and the United States because of its aging Golf and Passat models, which are losing out to newer cars from the likes of Peugeot (PCGE) and Ford (F). Net income in the three-month period to September 30 fell to 439 million euros ($400 million) from 903 million euros a year ago. But sales rose 2.2 percent to 21.2 billion euros. Third-quarter pretax profit slid 48 percent to 711 million euros, missing expectations. Analysts polled by Reuters had expected a pretax profit of about 952 million euros. The company had already warned in July it would not meet its target, saying pretax profit would come in at "around four billion euros" for the full year. The company -- which makes the new Beetle, Golf and Passat, and owns the luxury marques Audi, Lamborghini, Rolls-Royce and Bentley -- is hoping that new models like the VW Phaeton, Touareg, Polo, Seat Ibiza and Audi A8 will pull in buyers. It said it would stick to its full-year target as it continues to cut costs. "I think the market belief in the company guidance will deteriorate substantially. You have to make a huge of leap of faith to believe it,'' Albrecht Denninghof, an analyst at HVB, told Reuters. Analysts have predicted European car sales could fall by as much as five percent this year. Volkswagen's sales in Western Europe, including Germany, fell 4 percent in the nine months to September 30. Group sales declined 3.6 percent to 3.7 million units. Volkswagen's stock (FVOW), which has fallen by a third this year, rose 2.2 percent to 37 euros in midday Frankfurt trading on Wednesday.
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