UPDATE 1-VW Q3 profit slumps on Europe gloom and tech costs

Andreas Cremer

(Adds detail, comment from report.)

BERLIN, Oct 24 (Reuters) - Volkswagen's third-quarter underlying profit tumbled by a fifth as the deepening slump in European car markets and costs of a technology overhaul weighed on the auto maker's results.

Operating profit declined to 2.34 billion euros ($3.04 billion) from 2.89 billion a year earlier, the company said on Wednesday, just short of a 2.35 billion euro consensus in a Reuters poll.

Europe's largest carmaker reaffirmed its goals to increase vehicle sales and revenue for the group in 2012 and to match last year's operating profit of a record 11.27 billion euros.

The downturn in European auto markets cut monthly delivery growth of VW brand vehicles to the slowest pace in eight months in September. VW's flagship brand even conceded a double-digit decline in car sales across the European Union.

``The increasingly worsening economic situation in western Europe burdened the auto industry'' between July and September, VW said in the report.

Wolfsburg, Germany-based VW, which aims to replace Toyota Motor Corp as the world's biggest car maker by 2018, is saddled with costs to roll out a new car platform, or architecture, to factories to assemble small and medium-sized vehicles including the Golf hatchback and the CC coupe. ($1 = 0.7714 euros)

(Reporting by Andreas Cremer; Editing by Hans-Juergen Peters)