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Business

As Automakers Sputter, Volkswagen Hopes to Speed Ahead

Volkswagen expects to shoulder in on weaker rivals as the financial crisis continues. Yet Europe's largest automaker warned it will not sell as many cars in 2009 as it did last year.

Prototype of a VW Golf Hybrid

VW hopes environmentally-friendly technology will win over drivers

Germany's VW announced that it is well-positioned to weather the current crisis in the auto sector, although the car company said it expects a slowdown in 2009.

Volkswagen has not given up on its aim to overtake Japanese rival Toyota by 2018 to become the world's leading auto manufacturer. Audi, VW's high-end line, said Monday that it has its sights set on overtaking domestic rivals BMW and Mercedes in Europe during the next year despite the market slump.

Banking on green technology

Martin Winterkorn in a factory

VW's Winterkorn said he's confident VW will weather the crisis

VW said its wide offering environmentally-friendly cars will help give it a boost over competitors. The carmaker has 24 models which emit less that 120 grams of carbon dioxide per kilometer, which meets a strict European Union target planned for 2012.

VW also recently announced it plans to become the first manufacturer of an affordable, mass-produced electric car. VW will develop electric drive units together with Japanese electronics group Toshiba.

Besides green technology, VW also hopes that strong sales in China will keep up profits. The group is also heavily invested in emerging markets such as Brazil.

"We are well-positioned to emerge strengthened from the crisis," Winterkorn said.

Profits up, for now

After-tax profits at VW rose 14 percent to 4.7 billion euros ($5.9 billion) in 2008 compared with a year earlier.

VW Chairman Martin Winterkorn acknowledged that "the current year remains extremely difficult for the entire automotive industry," but added: "Our target is to fare better than the overall market."

Toyta logo on a red car

VW aims to overtake Toyota in global sales

Yet much of VW's 2008 profit was made before the bottom fell out of the global auto market. VW would not say how much money it forecasts for 2009, citing "high volatility" in the markets. VW warned that sales and earnings will be lower in 2009.

"Based on the extremely weak business at the beginning of the year, earnings will not reach the high levels of previous years," the company added.

VW Group brands include Volkswagen, Skoda, Seat, Audi and Bentley. Volkswagen's main parent, Porsche Automobil Holding owns 50.76 percent and plans raise that stake this year to 75 percent. Porsche did not give precise operating earnings figures on Monday, but said sales declined by 13 percent in the past six months.

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