Volkswagen will cut its 2004 operating profit target to €1.5-2 billion euros ($US1.9-2.5 billion) before one-off factors, German daily Frankfurter Allgemeine Zeitung said, according to Reuters.

The report said VW, due to post second-quarter earnings on Friday, originally had planned to beat last year’s figure of €2.5 billion before special items.

A company spokesman reportedly declined to comment to Reuters on the newspaper report which did not quote any sources and was due to be published on Wednesday.

Due to a weak second quarter in its core automotive business, Chief Executive Bernd Pischetsrieder is reported to have put plans to build a ‘C1’ model on ice for the time being, Reuters said.

The model due for launch in 2007 was supposed to fill the gap between the VW Passat saloon and the VW Phaeton luxury limousine, the report added.

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Reuters said the newspaper also wrote that Pischetsrieder would not announce an increase in the €2.2 billion restructuring plan ForMotion to avoid conflict with unions prior to a new round of wage agreement talks starting in September.