Audi’s pre-tax profit fell over 11% to €1.11 billion ($US1.4 billion) in 2003, meaning Volkswagen‘s luxury unit alone generated over 70% of VW‘s profits, Reuters said.

Sales reportedly rose to €23.41 billion euros in 2003 from 22.60 billion the year earlier.

According to Reuters, Audi, which the year before had accounted for just under a third of VW’s pre-tax earnings, said in a statement that net profit rose 5% to €816 million last year and added that it expected stable earnings this year.

Reuters said Audi wants to increase both sales revenue and unit sales this year after saying in January that unit sales rose 3.4% in 2003 to 767,000 vehicles and that it expected to sell 1% to 2% more cars this year thanks to the launch of updated A3 hatchback and A6 executive sedan model lines.

Despite last year’s record unit sales, Audi has seen revenues and profits dented by a strong euro and fierce price competition in a sluggish global car market, the report added.

Reuters noted that Audi, like Europe’s other luxury car makers, remains very profitable while propping up struggling owner Volkswagen, which said last week that operating earnings halved last year.

The report said that a tough market dented Audi’s European revenues last year although sales in China are in overdrive after it started assembling A4 sedans there.