(Bloomberg) -- Volkswagen AG shares fell after the carmaker said sales growth will slow this year as the auto industry grapples with slumping demand for electric vehicles and intensifying competition.

New products will help Volkswagen exceed the €322 billion ($348 billion) it reported for 2023 by as much as 5%, the carmaker said Friday in a pre-release of its results. That’s a drop from 15% sales growth last year.

Shares dropped as much as 7.2% before paring losses, contributing to a 6.7% decline in the stock over the past year.

Carmakers have been feeding off pent-up demand following protracted supply-chain problems across the industry, helping offset growing economic challenges. High living and borrowing costs are expected to weigh on consumption this year, while Volkswagen’s biggest market China struggles with a property slump and weak business confidence.

“We are confident about 2024, despite the muted economic outlook and intense competition,” Chief Financial Officer Arno Antlitz said in a statement.

Volkswagen is pushing forward with an ambitious savings plan at its namesake brand to raise margins and catch up to rivals like Stellantis NV. That effort is even more urgent with slowing growth for electric cars and competition from cheaper Chinese models, other European carmakers and Tesla Inc.

Read More: Europe’s Biggest Car Market to See First EV Slump Since 2016

Volkswagen said Friday it will trim €10 billion off its five-year rolling spending plan, bringing it to €170 billion, citing a tapering off of peak spending on both combustion engine models and EVs. 

Fourth quarter revenue reached €87.1 billion, with an operating profit margin of 7%. Adjusted operating profit stayed roughly flat at €22.6 billion, taking into account negative effects from commodity hedging totaling €3.2 billion.

Volkswagen said it was increasing its payout to ordinary and preferred shareholders by €0.30 per share, with the payout ratio of 28% missing the company’s previous target of 30%.

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