Volkswagen to Break-even in 2009

by : Rain Stockton

Europe's largest automaker Volkswagen AG is hoping to obtain break-even for its North American market by 2009 or earliest that is according to Volkswagen's Chief Labor Representative Bernd Osterloh in an interview with Dow Jones Newswires last Friday.

Osterloh was quoted saying, "I hope this is achieved." He also admitted that it's going to be hard target to achieve. He further added that in order to reach such goal there should be an increase in productivity and at the same time there should be a reduction in the purchasing costs. He also suggest for the purchasing of parts locally.

Mr. Osterloh has said that the North America would become the central market for the company in the coming years. And in accordance to such plan, Europe's largest automaker and producer of , Volkswagen has already sent its best man for the North American market, Stefan Jacoby, who would assume the position of Chief Executive of Volkswagen of America starting this coming September 1, 2007.

Mr. Osterloh said that he is not yet aware whether production would resume in the United States with the construction of the new factory. But one thing is for sure that before the Wolfsburg-based automaker gives out the go signal, there would be a study first on the capacity utilization in Mexico.

Mr. Osterloh also explained that it is important for the company to produce car models for the US market if it wants to produce sales volume. He said models that should be made must be similar to the size of the Passat or the Jetta. And if in case the plan really do pushed through then models that are especially designed for the US market could be officially launched before 2010.

Volkswagen Second-Quarter Profit Increased

In other news, Volkswagen has recently reported that its second quarter profit increased by 16 percent attributed to new models of both the Skoda and Audi units. The German automaker has also obtained a rise in net income that closes to 1 billion euros or $1.38 billion from previous 859 million euros in the year 2006 that is according to the median estimate of 11 analysts that takes part of the survey conducted by Bloomberg News.

Aside from the 11 analysts there were also banks that participated in the survey namely Bankhauz Metzler, M.M. Warburg, Societe Generale, JPMorgan, Morgan Stanley, Unicredit, UBS, DZ Bank, Bankhaus Lampe, ABN Amro and Exane BNP Paribas.