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VW CEO warns 2009 will be tough for industry

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VW CEO warns 2009 will be tough for industry
October 22, 2008 8:36 AM ET
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WOLFSBURG, Germany (AP) - The chief executive of Volkswagen AG warned Wednesday that the auto industry faces a difficult business climate next year, but added that his company — Europe's biggest carmaker — still expects to reach this year's goals.

"The world economy is going through tough times," Martin Winterkorn said on Wednesday. "We don't know the full impact on our business yet, but VW is doing better than the competition so far."

Winterkorn added that "2009 will be difficult for the entire industry."

He made the remarks during a meeting with civic and business leaders from Chattanooga, Tenn., where the company plans to open a new manufacturing plant in 2011.

The visit to Germany, led by Tennessee Governor Phil Bredesen, is part of an effort to persuade auto parts suppliers to locate production facilities near the new plant, which is projected to cost about $1 billion and employ more than 2,000 people.

Speaking about the Chattanooga plant, Winterkorn said "I'm confident we'll build another great example of German and American partnership."

Volkswagen's brands include VW, Audi, Lamborghini, Bentley, Bugatti, Seat and Skoda. Winterkorn reiterated that Volkswagen expects to surpass the 6.2 million cars it sold in 2007, which was an increase in sales of 4 percent on the previous year.

Earlier this month, European automakers and several European units of their American competitors announced plans to cut production and jobs because of flagging demand from customers rattled by uncertainty amid the global financial crisis.

BMW AG, Daimler AG, General Motors Corp. subsidiary Adam Opel AG and the German unit of Ford Motor Co. all announced production cutbacks. GM said its other subsidiaries in Europe were also affected. Italy's Fiat and Renault of France likewise said they would curtail production.

Volkswagen, however, has managed to avoid such a move, as has its Audi subsidiary, although its Spanish-based Seat unit planned to produce 13,000 fewer cars by stopping assembly lines at three plants for a week.

Volkswagen announces its third-quarter results on Oct. 30 and analysts expect it to report a profit on the back of solid sales and because it is less exposed to the U.S. market than its competitors.

The company saw its second-quarter net profit rise 35 percent to 1.6 billion euros ($2.11 billion) on sales of 29.5 billion euros ($38.89 billion), pushed up by improved demand in India, Russia and China.

Shares of Volkswagen were up more than 3 percent to 250.13 euros ($329.77) on Wednesday even though the DAX index was down 3.6 percent.

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It's getting really tough everywhere, not just the auto industry... everyone's looking for anything that saves cash right now... a sign this might be a long crisis and not some minor thing...

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Wait.....didn't these guys predict they'd be #3 in world-wide sales in a few years? Does that mean they've changed their mind? :unsure:

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Given our current economy, the #1 selling transportation device in three years will have four legs and $h! on the road.

Chris

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Well thanks for letting us know Martin Winterkorn. I hadn't noticed!!! Kool Surname though! :yes:

Edited by Pontiac Custom-S
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