File picture shows an employee posing with an emblem for a Volkswagen Golf car during a photocall in a production line at the Volkswagen headquarters in Wolfsburg November 14, 2008.CHRISTIAN CHARISIUS/Reuters
Volkswagen AG's pursuit of record profits may suffer a setback this year as Europe's biggest car maker becomes more cautious on its business outlook amid declining European auto markets.
The German company said on Friday its goal for 2013 was to match the record €11.5-billion ($15.21-billion U.S.) operating profit achieved last year.
The group warned of "ongoing uncertainty in the economic environment" and shares were down at midday.
Germany's benchmark index DAX slipped 0.8 per cent, partly because of disappointment over VW's planned dividend of €3.56 per preference share, short of the €3.85 expected on average in a Reuters poll.
Record sales of 9.1 million vehicles last year on overseas demand outweighed costs of an engineering revamp, helping VW to beat its own target for 2012 of merely matching 2011 profit.
Yet, after resisting most of last year's European slump, VW is growing more vulnerable to the crisis in its core market. Sales of VW's main namesake brand, accounting for almost a third of group profit, plunged 12.3 per cent in the region excluding Germany in January.
"While we shall see positive effects from our attractive model range and strong market position, there will also be increasingly stiff competition in a challenging market environment," VW said.