Volkswagen AG’s commercial vehicle unit will continue to post losses this year due to weak demand in Germany and will break even in 2005, the head of the division told Reuters on Tuesday.

“We see 2004 as a bridge year. We want to reach an operating turnaround in 2005,” Bernd Wiedemann, head of Volkswagen commercial vehicles, said at a trade fair in Hanover. He added that meant he expected the unit to break even next year.

The report noted that commercial-vehicle division of Europe’s biggest car maker had an operating loss of €233 million ($US283 million) in 2003, its first annual loss in eight years and is undergoing an extensive restructuring. By contrast, DaimlerChrysler’s trucks business continues to boom, its head on Tuesday reiterating the division’s forecast for sharply higher operating profit.

Wiedemann reportedly said in March he was striving for a modest return to profit this year but warned that would depend on a broader economic recovery.

He told Reuters on Tuesday that deliveries at VW commercial vehicles had risen by 20.2% in the first eight months of 2004, adding he expected growth of 20% for the year as a whole.

Deliveries of trucks, vans and buses should also grow by a double-digit percentage in 2005, the report added.