VW braces for market challenges as posts 2013 record sales

BERLIN/FRANKFURT (Reuters) - Europe's largest automaker Volkswagen is bracing for challenging markets as it posted record 2013 sales with demand from China and North America more than offsetting declining deliveries in core European markets.

"Even though the situation in Europe would appear to be stabilizing, economic uncertainty will continue and the challenges we will be facing on markets will remain virtually unchanged," VW sales chief Christian Klingler said in a statement on Saturday.

"As far as the current year is concerned, we expect market developments on a level similar to 2013," he added.

December sales of passenger cars, vans and sport-utility vehicles across the multi-brand group rose 6.3 percent to 833,200 autos compared with 784,100 a year ago, Wolfsburg, Germany-based VW said.

2013 deliveries were up almost 5 percent at a record 9.7 million vehicles, ranging from small city cars to heavy trucks.

VW has pledged to surpass Toyota and General Motors as the world's No. 1 carmaker no later than 2018, aiming to boost annual deliveries to at least 10 million cars.

Buoyed by strong overall car demand, Volkswagen saw 2013 sales in China spike 16.2 percent to 3.3 million and North American sales rise 5.6 percent to 888,000 cars.

In the United States, VW clinched a 2.6 percent gain in group deliveries, thanks to record sales of its premium flagship Audi. Still, the German powerhouse continues to battle American perceptions of lower value for money, mediocre quality and disregard for U.S. tastes as it vies for attention at the Detroit auto show next week.

By contrast, sales in its European home market dropped by 0.5 percent to 3.7 million vehicles and South American deliveries decreased 10.1 percent to 908,000.

World-wide the sales figures of luxury brand Audi stood out with a rise of 8.3 percent, while budget brand Skoda saw deliveries fall 2 percent.

(Reporting by Arno Schuetze; Writing by Andreas Cremer; Editing by Toby Chopra)