March 14 - Volkswagen, Europe's biggest carmaker, is to step up production in fast-growing emerging markets like China to offset deteriorating demand closer to home. Sonia Legg reports
Europe's biggest car maker has hit the accelerator pedal in China. Volkswagens' planning a new assembly plant there aimed at doubling capacity to over 4 million vehicles by 2018. The announcement came as the company released its annual report. Operating profit at the group's main VW brand fell 4 percent last year to 3.6 billion euros. CEO Martin Winterkorn said that's largely down to a fall in demand in Europe. (SOUNDBITE) (GERMAN): CHIEF EXECUTIVE, MARTIN WINTERKORN, SAYING: "2012 was a demanding one for the car sector. The European debt crisis hit our industry hard. Nonetheless, Volkswagen was a stable and reliable anchor." China is already VW's biggest market. Russia, India, the Americas and Southeast Asia are also becoming increasingly important. So too is the Porsche brand. (SOUNDBITE) (GERMAN): CHIEF EXECUTIVE, MARTIN WINTERKORN, SAYING: "The Porsche brand has been fully integrated into the Volkswagen group since August 1 2012 -- and it's already a big success story. We initially predicted 700 million euros of potential synergies, but now we are talking about one billion euros a year." Predictably perhaps, operating profit at the group's Spanish brand Seat was down by a third, while the Skoda division in the Czech Republic saw a 4% fall. The biggest slump though was VW deliveries in Germany - down more than 9 percent in the first two months this year.