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Thursday, 22 March, 2001, 13:56 GMT
VW reports record profits
New VW Beetle
VW has reported record profits and strong sales
Volkswagen, the biggest car maker in Europe, has reported record results and predicts the growth will continue despite the economic downturn.

But chairman Ferdinand Piech also said "since few impulses can be expected from the markets" substantial efforts would be needed to improve efficiency and cut costs.

Mime artist promoting VW's new Beetle
Mime artists were used to promote the new VW in Asia and now sales are booming in Japan
Mr Piech, who was speaking at the group's annual earnings news conference, believes VW's sales in the US would "at least" not decline this year.

However, he did say that the North American market is cooling down, while Japan is "booming".

The car maker made a record pre-tax profit of 3.83bn euros (2.39bn), up 37.5% percent.

It is the first time VW has calculated its results using the International Accounting Standards, which bettered a previous profit figure of 3.47bn euros published on 20 February.

This latter figure had been derived from the German HGB accounting rules.

Keep on trucking

VW said it wants to expand or seek co-operation in the commercial vehicle sector.

"VW has future plans for its trucks business as well as for its other divisions," Mr Piech said.

VW already owns a 18.7% share and 34% voting stake in the Swedish truck maker Scania.

A takeover opportunity exists because Volvo must dispose of its 45.5% share and 30% voting stake in Scania to secure European Commission approval of its tie-up with Renault.

"It's not our intention to purchase the Volvo package under these circumstances because it was bought at too high a price," Mr Piech said.

Mr Piech suggested that Volvo would be forced to lower the asking price as the three-year deadline approached, giving VW an opportunity to pounce.

When VW announced last year that it was buying a stake in Scania, it insisted that it did not want to take control of the Swedish group, but would be content with a partnership.

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