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VW chief pessimistic

VW chief executive Bernd Pischetsrieder says the group will produce lower profits this year because of weak demand in Europe and the appreciation of the euro against the U.S. dollar.

Although he made no precise forecasts, in an interview with the German news weekly Focus , he said: “This year will be worse than last year for earnings.”

VW already warned in March that it won't be able to match its 2002 operating profit of 4.76bn euros this year unless U.S. and Western European markets recover.

Although the company said it expected business to pick up later this year with the launch of new models such as the new Golf, Pischetsrieder was more bearish.

"Western Europe and the German market are near the bad level of last year and the first quarter. The first quarter is not representative of the full year. But there is still a massive reluctance to buy, a high savings rate and a very high average age of cars."

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