Volkswagen has told workers next year will "not be easy'' for its namesake brand as the division prepares to bring out new models in 2008.

"The new models are still in the planning and therefore we can't expect any relief to come from sales,'' Wolfgang Bernhard, Volkswagen brand chief, said in a letter to employees cited by Bloomberg News. "Instead we have to concentrate on improving our production processes.''

The Volkswagen brand has reduced material costs by 1bn euros ($US1.3bn) this year and over the last three years has improved productivity 30%, Bernhard reportedly said in the letter.

This year the group, trying to cut costs, shed 20,000 workers and introduce 28 new models by the end of 2008, will post record unit sales and revenue, Bernd Pischetsrieder, the outgoing chief executive officer, was reported to have said in a separate letter to employees.

Operating profit, or earning before interest and taxes, will increase this year, he said, without being more specific, according to Bloomberg News.

The news agency added that Volkswagen also said on Thursday it would post a one-time net gain of EUR951m this year due to new German tax rules. Volkswagen, which legally must book the gain this year, will receive reimbursement from the government in 10 annual payments between 2008 and 2017, the carmaker reportedly said in a statement.

The gain is the result of a change in the law governing corporate tax credits, which Germany's upper house of parliament passed on 24 November, Volkswagen said, according to Bloomberg News.

The change will not impact Volkswagen's financial forecast that 2006 operating profit before special items will increase from last year's figure of 3.14bn euros, a Volkswagen spokeswoman told the news agency.

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