Volkswagen plans to increase production at its Slovak unit by around 20% from this year to next, with a further rise probable in 2005, an official from Volkswagen Slovakia told Reuters on Tuesday.

Volkswagen Slovakia accounts for around 15% of this ex-Soviet satellite country’s sales abroad, by itself creating a hefty trade surplus that helps narrow Slovakia’s troublesome external deficit, Reuters noted.

Wolfgang Rohroff, manager of Volkswagen Slovakia’s supply division, told the news agency the factory in the western suburbs of the capital city Bratislava should increase output to 340,000-350,000 cars in 2004, from expectations this year of 280,000-290,000 cars.

“At the moment, all over the world, the automotive industry is declining a little bit, but we are in the specific position in Volkswagen Group of remaining stable and even increasing production,” Rohroff told journalists on the sidelines of an investment conference.

“In 2002, we produced around 235,000 (cars). This year it will be 280,000-290,000, close to 300,000, and next year it will be about 340,000 to 350,000.”

According to Reuters, Rohroff said the increase in Slovak output would result from a shift in production within the group, but he did not name any areas from where manufacturing would be moved to Slovakia.

He reportedly added that Volkswagen Slovakia would also very likely begin producing an Audi sports utility vehicle at the start of 2005, and that work to prepare the Slovak plant for making the model would begin in the middle of next year, Reuters said.

“What is on the agenda is that an Audi sports utility vehicle is most probably to be produced here,” he said.

Reuters noted that Volkswagen Slovakia saw a 35% jump in sales to 30.6 billion crowns in the first quarter despite declining demand for new cars in western Europe. It exported nearly all of that amount, creating an 11 billion crown trade surplus from January to March.

Reuters added that, with its educated workforce and average monthly wages of only around $US415, Slovakia has emerged as a favoured destination in central Europe for foreign companies, particularly car and car part manufacturers, looking to set up production facilities near their mature western markets and the quickly growing east.

Earlier this year, French carmaker PSA Peugeot Citroen said it would build a 700-million-euro, 300,000 cars/year plant in western Slovakia by 2006, Reuters said.