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FRANKFURT, Feb 19 (Reuters) - Europe's largest carmaker Volkswagen AG said on Wednesday its pre-tax profit slipped 9.6 percent in 2002 to 3.986 billion euros ($4.26 billion), meeting the company's target of around four billion.
The group, which is suffering from an ageing product range as it battles weak demand and unfavourable exchange rates, had been expected to post a pre-tax figure of 3.963 billion euros, according to the average estimate in a Reuters poll.
VW reported group revenues of 86.948 billion euros, down 1.8 percent from the previous year. It said it would propose an unchanged dividend of 1.3 euros per ordinary share.
VW stock was down 0.44 percent at 27.88 euros by 0850 GMT, outperforming a 0.72 percent fall on the Dow Jones European autos index .
Volkswagen said in October it still aimed to post pre-tax earnings of around four billion euros for 2002, although it cautioned that a further deterioration in stock markets could have an effect on its financial result.
The full-year figures imply a pre-tax profit of 1.012 billion euros in the fourth quarter, according to Reuters calculations, above analysts' expectations.
The group is depending on its recently-launched Touran minivan to boost its sales this year at a time when its top-selling Golf and Passat models are beginning to look long in the tooth alongside fresher-faced rivals.
The company faces tough competition from French rivals PSA Peugeot Citroen and Renault , the latter also trying to run down older models ahead of new launches.
The French carmakers last week posted strong 2002 profits, but Renault disappointed investors with a cautious outlook.
VW gave no outlook, but in January Chief Executive Bernd Pischetsrieder said he was confident about earnings and sales this year.
VW sold 4.98 million vehicles in 2002, a 1.9 percent drop from the previous year, and the company has said it aims to lift sales to over five million this year.
VW will provide more details of its results in March when it holds its annual press conference.