FRANKFURT — Volkswagen Group lowered its outlook for sales growth to reflect weakening demand in big car markets such as China.
The automaker cut its revenue growth projection next year to at least 20 percent compared with 2016. The previous forecast was for a 25 percent increase.
“We are facing a declining market environment,” CEO Herbert Diess said during a telephone conference with analysts and investors.
Some areas are poised to decline further next year, he said.
VW Group is keeping its operating profit margin targets excluding special items for this year and next, Chief Financial Officer Frank Witter said during the presentation. Its goal for return on sales for 2021 should be similar to 2020, he said.
Witter said the group was still “very resilient” in an increasingly difficult economic environment.
“Strict cost discipline is, however, necessary to achieve our goals in the long term,” VW said in a statement.
VW last month trimmed its global vehicle delivery forecast as cooling economic growth in some regions weighs on demand. At the same time, VW plans to lift spending to record levels on new technology like electric cars and software operations.
VW has allocated 60 billion euros ($66 billion) in investment for future technology over the next five years.
Diess said on Monday the spending plan includes a doubling of outlays for software and digital operations to 14.4 billion euros.
Reuters contributed to this report.