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Volkswagen's announces financial "fireworks"

Cost cutting, productivity improvements and what one exec called a “firework of new models” has seen Volkswagen announce record financial results.

The Volkswagen Group sold more vehicles worldwide in 2006 than ever before and revenue exceeded €100 billion (£67 billion) for the first time, plus operating profit before special items rose 51.7% to €4.4 billion (£3 billion). Group sales revenue has risen by 11.6% in 2006 to around €105 billion (£71 billion), while the cost of sales before special items had risen by 10.5%.

“We cut costs, increased productivity and quality, and launched a fireworks of new models”, said Prof. Dr. Martin Winterkorn, management board chairman of Volkswagen AG. A total of 38 new models and product upgrades were launched last year.

Winterkorn said of the future: “As an innovation leader, the Volkswagen Group will extend its leading position in the global competitive environment, develop new markets and continue to grow profitably. It will focus in particular on the Russian and Indian markets, which have strong growth potential.

“Over the next 10 years, the Volkswagen brand will develop into the most innovative volume manufacturer with the best quality in its class. Strategically, it is excellently positioned and offers unique growth potential with an unbeatable range of models. To be able to leverage this potential to the full, however, the restructuring process that was successfully initiated must be continued systematically and proactively.”

On the issue of the target levels of reduced CO2 emissions set by the European Union, Winterkorn said VW’s goal is to accelerate the use of alternative fuels and to reduce fuel consumption overall. The company is committed to developing second-generation biofuels. The Group will also offer hybrid vehicles in the future. It will launch a hybrid version of the Audi Q7 and the Volkswagen Touareg in 2008. In addition, further economical, environmentally friendly models will be added to the BlueMotion series.

Earlier this year the European Commission set reduced emission targets for new cars. It plans to introduce a legally binding target for average CO2 emissions of 130 grammes per kilometre, 10 grammes more than the target set in 1996 of 120g/km.

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