VW renews hope for 1994 after strong start

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The Independent Online
CASTING off the heavy gloom that gripped the Volkswagen group last year, Germany's leading car maker expressed cautious optimism for 1994, following a better than expected start. Despite continuing heavy losses at Seat, its Spanish subsidiary, VW expects to break even this year, after making a DM1.9bn ( pounds 776m) net loss in 1993.

Ferdinand Piech, chief executive, forecast a group loss of around DM400m in the first quarter of this year, a reduction of two-thirds on the same period in 1993. VW's parent company, which consists largely of domestic operations, should break even in the first quarter compared with a DM900m loss in the same period last year.

Mr Piech spoke of VW currently outperforming the weak market in Germany thanks to lower prices made possible by cost savings.

The VW marque saw domestic first-quarter orders increase by 54 per cent compared with the very low 1993 level. By contrast Audi, VW's upmarket subsidiary, saw orders drop by 23 per cent.

The four-day working week, which will begin operating throughout the group's German plants early next month, will provide savings of DM1.6bn this year, the company claimed.

Production cost savings of 10 per cent had enabled VW, for the first time since the war, to cut the price of its cars between DM1,000 and DM2,800 last year, Mr Piech said.

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