Sales of Volkswagen's new Golf, which the company had hoped would boost end-of-year revenues, are lagging expectations due to low demand and technical problems, according to two separate reports cited by Reuters.

VW chief executive Bernd Pischetsrieder told a German newspaper the company would build about 25,000 fewer than the planned 135,000 in 2003 of the new model of its best-selling hatchback because of technical problems in production, the news agency said.

Pischetsrieder reportedly said the problems - relating to the building of chassis, doors and windows - would be solved in time for VW to achieve its target of building 600,000 fifth-generation Golfs in 2004.

He added that there were no problems with the quality of the new Golf, which is the world's second most popular car after the Toyota Corolla, Reuters added.

"Feedback from traders and clients is excellent," Pischetsrieder reportedly told the Welt am Sonntag newspaper.

However, motor industry newspaper Automobilwoche reported that traders in Germany - Volkswagen's biggest market - were disappointed with demand for the new Golf, which went on sale in October, Reuters said.

In a survey published on Monday, the magazine reportedly said the majority of 50 VW dealerships it had questioned said demand was far lower than expected and that sales were below levels for the previous model.

It also quoted the head of VW's supervisory board as saying that business was "currently weak, -- unfortunately, that includes for the new Golf", Reuters added.

According to the report, many dealers also said they were frustrated that extras such as automatic transmission and towing accessories would not be available for months.

Reuters noted that Volkswagen said in October it expected its 2003 profits to be less than half those of the previous year but that it might lay on extra production shifts to meet expected high demand for the new Golf - the model line traditionally accounts for about half of profits at the VW brand.