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VW reports rise in profits

Volkswagen Group has announced a global operating profit of €464m (£317.7m) in the first quarter compared to €329m (£225.3m) last year.

Volkswagen’s automotive division reported an operating profit of €234m (£160.2m) compared to €98m (£67.1m) in 2004.

January-March 2005 sales revenue was 2.4% lower year-on-year at €21.1bn (£14.4bn).

Automotive division cash flows from operating activities of €708m (£485m) (previous year:

€1,374m (£941.2m) were reduced by the launch costs of new models, the company said.

VW said it did not expect "any improvement in the situation in the high-volume automotive markets in the short term".

It added that the current weakness of the dollar continued to be a problem, as did uncertainty over the price of steel and other raw materials.

But on a positive note, VW said it still expected to see improved sales both in the US and Europe as the year progresses, thanks to the strength of new models, such as its revised Passat saloon.

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