VW To Adjust Forcast Down Slightly

FRANKFURT, Oct 21 Ferdinand Piech Chief Executive of Volkswagen told German newspaper Die Welt that they will revise down this years business forecasts due to weak demand in the United States and that``despite all our problems, we'll only have to revise our forecasts slightly,'' he told the newspaper.

``Group sales in the year-to-date are up 2.1 percent from the year-ago,'' he added. This represents a slowdown from unit sales growth of 2.7 percent in the first eight months of this year.

But Piech said Volkswagen would be able to compensate for a slump on the U.S. market, where it has seen its unit sales dive in the last month.

``From the current perspective, sales volume and earnings will be up in the third quarter,'' Piech said. In the first nine months of this year, VW's U.S. unit sales were down 1.8 percent from year-ago levels, while unit sales in September alone dropped 15.4 percent on the year.

German carmakers have this year been relying on strong exports, especially to the United States, to offset weak demand at home and to support profits.

But demand slumped after the September 11 attacks, which delivered a sharp blow to business and consumer confidence.

Volkswagen is due to publish third-quarter figures on October 30.

VW TO FOLLOW DUAL BRAND STRATEGY

Reuters reported that when asked about VW's brand structure, Piech said the supervisory board would vote on plans to split the group's brands in two at its next meeting.

Last month, Volkswagen Chief Executive designate Bernd Pischetsrieder unveiled plans to split VW's brands into ``sporty'' and ``classical'' groups.

The ``sporty'' group would include Seat, Audi and Lamborghini, while the ``classical'' stable would host VW's own brand, Skoda and Bentley.

Piech said the advantage of the dual brand strategy was that smaller brands would be more closely tied to the parent company and would complement its product range.

Piech said the two divisons would be managed separately, with managers to be proposed at the supervisory board meeting.

Asked whether VW planned to freeze the introduction of new models, Piech said new models were only being planned for the commercial vehicle division.