The Volkswagen logo.

Frankfurt - Volkswagen, Europe's biggest carmaker, said Friday that its net profit zoomed ahead by more the 40 percent last year on higher vehicle sales.

VW said in a statement its net profit soared by 40.9 percent to a record 21.7 billion euros ($28.6 billion) in 2012 as revenues rose by 20.9 percent to 192.7 billion euros and deliveries to customers were up 12.2 percent at 9.276 million vehicles.

Underlying or operating profit rose by 2.1 percent to 11.51 billion euros.

The group said it would propose an increased dividend of 3.50 euros per share for 2012 compared with 3.00 euros per share a year earlier.

Looking ahead, VW said it expected to “outperform the market as a whole in a challenging environment” and deliveries to customers would increase year-on-year.

“However, we are not completely immune to the intense competition and the impact this has on business,” it cautioned.

While 2013 sales revenues were expected to exceed the 2012

level, “given the ongoing uncertainty in the economic environment, our goal for operating profit is to match the prior-year level in 2013,” VW said.

Despite the carmaker's strong 2012 performance, analysts had been expecting an even stronger gain in profits last year.

As a result, VW shares were the biggest losers on the Frankfurt stock exchange in afternoon trading, plummeting 4.26 percent while the overall market was showing a gain of 0.81 percent. - Sapa-AFP