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Tuesday, 8 May, 2001, 09:56 GMT 10:56 UK
Happy motoring for VW
VW Beetle
VW predicts it will hit profit targets despite gloom in the auto sector
Volkswagen, the biggest car maker in Europe, said on Tuesday its net profit rose 15% in the first three months of 2001.

VW said that looking ahead to the current year, it was expecting a further rise of pre-tax profit and sales.

The company forecast comes despite warning of the negative outlook in the auto industry.

"We're not expecting any impulses from developments in the world auto markets. In order to reach our profit targets, we're implementing extensive measures to optimise costs and revenue structures in all markets and regions," the statement said.

The figures were calculated using for the first time the International Accounting Standards (IAS), to which VW switched this year, as well as the German HGB standard.

The IAS figure, for which there was no comparison for last years, was in line with analyst expectations.

Using the HGB, first-quarter pre-tax profit rose 15% to 708m euros ($631m) and under IAS it amounted to 1.25bn euros ($1.1bn).

Results outlook

This year is Ferdinand Piech's last full year as chief executive and analysts expect him to deliver a set of strong results as a legacy.

In April, VW had said it aimed to cut costs by up to 2bn Deutschmarks this year, but did say where the cuts would be made.

Analysts had been hoping for some signs with the first quarter results but received none.

The company's UK operations of Rolls-Royce/Bentley were still affected by ongoing costs for the development of a new product range, it said.

Sales up

In the first quarter, VW's unit sales rose 0.6%, despite weakening markets in both Germany and in the United States.

Deliveries to US customers fell 6.8% in the first quarter, while deliveries in Germany fell 9.4%.

VW shares are currently trading at the level where they started the year.

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