Car markets have started 2004 "very weak", Volkswagen chairman Bernd Pischetsrieder told the company's annual financial results press conference.

That was especially true for January, while February had shown slight signs of improvement. Even though the Volkswagen group had gone against the trend and increased its market shares during this period, "the first quarter will be lousy, even compared with last year."

Apart from the market situation, start-up costs for new group vehicles such as the Audi A6, Seat Altea and Škoda Octavia would have a negative impact and, in addition, there would be one-off effects from converting dealer and importer contracts under the block exemption regulation.

Pischetsrieder said that, given the difficult overall situation in the market so far, there will probably only be a slight rise in vehicle deliveries by the Volkswagen group outside China during 2004 compared with the previous year.

But, by continuing with its model offensive in 2004, Volkswagen is claimed to be moving nearer to its goal of an ever-stronger presence in profitable market segments, as elsewhere.

"This is a real chance for Volkswagen. We could balance the effects of the hard price battle in the volume market by utilising the margin leeway in lucrative niches," the chairman told reporters.

There was no alternative, he said. "For Volkswagen's segment policy, either-or is not an option."

Thanks to the "ForMotion" program, the resources needed to continue along this path would be available in spite of the difficult conditions outlined.

Pischetsrieder also made it clear that "increasing volumes at any price is not meaningful." In view of the growing price pressure, the weak economy and the unfavourable exchange rates it was an ambitious goal for the group to aim at topping the operating profit before special items of about €2.5 billion for 2003 in 2004.