Volkswagen shares slipped 0.8% on Friday after the company warned profits could be hit this year due to rising investment in electric cars and new product launches.
The vehicle maker said it expected a return on sales of between 6.5% and 7.5% for the 2018 financial year versus 7.4% in 2017.
VW also said it expected the pace of global economic growth to slow slightly in 2018 and for regional trends in passenger car markets to be mixed in 2018.
“Challenges in the current fiscal year will arise mainly from the economic situation, increasing competition, exchange rate volatility and the diesel issue,” said VW in its annual results statement on Friday.
At the same time, it is forecasting revenue to increase by as much as 5% during the current financial year.
The group registered both improving sales and margins during 2017, delivering a record 10.7 million vehicles to customers.
VW said operating profit after special items had virtually doubled to a record €13.8bn in 2017 versus €7.1bn in the prior year, helped by strengthening sales of luxury vehicles.
Despite its Audi and Porsche badges performing strongly, the outcome disappointed consensus forecasts.
“We must not relax our efforts because huge challenges lie ahead. Shaping the Group’s transformation will not only require a great deal of time and energy; it will also be very expensive. This is why we must continue to keep our expenditure under tight control and advance the necessary innovations at the same time,” commented chief financial officer Frank Witter.
“Challenges in the current fiscal year will arise mainly from the economic situation, increasing competition, exchange rate volatility and the diesel issue,” the company added in its results statement.