Volkswagen AG chief executive Bernd Pischetsrieder has sought to gain the support of rank-and-file staff for the German car maker's ongoing cost-cutting measures, Dow Jones reported, citing news agency VWD on Thursday.

"Substantial cost-savings measures are needed to maintain our room for manoeuvre," the VWD report quoted Pischetsrieder as telling employees at a factory at Volkswagen's Wolfsburg headquarters.

"Every employee can and must contribute to secure the future," he reportedly said.

Dow Jones noted that Volkswagen has said it aims for cost-savings of about a billion euros this year after recording a 68% drop in net profit in the first quarter, as it struggles with aging car models and its exposure to currency fluctuations.

According to Dow Jones, Pischetsrieder said cost cuts were necessary because an economic pickup in the US, Western Europe and South America wasn't to be expected in the short term.

The company is, however, doing well in China. In the first five months of 2003, VW sold 271,700 cars in China, a 62% rise from 167,953 in the same period a year ago, a company spokesman told Dow Jones Newswires.