Volkswagen premium brand Audi on Tuesday said it would be difficult to match recent earning levels, although it expects sell a record number of vehicles in 2003, Dow Jones reported.

“The macroeconomic conditions are making it increasingly difficult to match the high full-year earnings of recent years,” the company reportedly said in its interim report and Dow Jones noted that the likely decline in earnings comes despite the company’s expectation of record car sales this year.

“For this sales success to filter through into the financial figures, we will need to optimise our internal cost structures further,” the company said, according to the news agency.

Dow Jones said Audi’s first-half net profit fell 25.1% to €289 million from €386 million, largely due to a 17.6% jump in distribution costs to €681 million from €579 million.

Distribution costs include marketing costs, such as sales incentives and the rise reflects the competitive pricing battle in the slumping car industry, Dow Jones noted.

The news agency said Audi’s operating profit fell 15.7% to €535 million from €635 million a year ago and first-half revenue, meanwhile, grew 1.8% on the year to €11.45 billion.

Dow Jones said Audi sold 387,767 cars in the first half, a 1.4% increase on the 382,478 sold in the same period a year ago.

A spokesman told the news agency Audi is seeking to improve internal processes and increase production efficiency but isn’t planning to lay off staff or reduce production capacity.