Audi expects to conclude a wage agreement for the Brussels plant that it recently took over from Volkswagen by the end of July.

“Negotiations are going well,” head of human resources Werner Widuckel told dpa-AFX news.

Audi agreed to take over the plant from Volkswagen in January, but only if it could reach a wage agreement by mid-year, and reduce personnel costs by a fifth. To do this Audi wants to increase the work week from 35 to 38 hours.

Audi is planning to produce its new small car dubbed A1 in Brussels from 2009. The A3 is already being produced at the plant alongside the Volkswagen Polo.