Volkswagen profits up 20 percent for full year

FRANKFURT, Germany (AP) — German automaker Volkswagen says net profit rose 20 percent last year to 10.8 billion euros ($12.1 billion), but offered a cautious outlook for this year.

The maker of Volkswagen, Audi, Skoda and SEAT brand cars said today that it increased its profit margins during 2014 and proposed to raise its dividend to shareholders.

For 2015, however, it saw a "persistently challenging market environment." It said sales would increase by at least 4 percent, "depending on economic conditions."

Volkswagen warned that economic trends in Latin America and Eastern Europe could affect its commercial vehicles and power engineering businesses. Russia's economy appears headed for recession after a sharp drop in the ruble and its recent conflict with Ukraine has undermined business confidence in Eastern Europe.

CEO Martin Winterkorn said in a statement that "despite the difficult economic environment, we achieved our goals for 2014."