Volkswagen will see Polo model production fall 10% to 233,000 units this year at its Navarre, northern Spain factory, down from 244,044 units in 2003, the company confirmed to just-auto.

The slowdown comes amid slumping car demand in Spain and particularly in Europe, where the plant exports 90% of output, a company spokesman said. However, the forecast marks an improvement from an earlier 2004 target of 227,000 units, he added.

European auto sales fell 1.5% in September from the year-ago period. They declined 3.7% and 2% respectively in big markets Germany and the UK.

Because of the lower demand, Navarre workers will down tools on 12 and 15 November, the spokesman added.

Asked whether VW will reduce Navarre's staff to adjust for sagging sales, the spokesman said there are no immediate lay off plans for the 4,500-strong factory.

However, he said unions and the company will begin negotiating a new two-year collective labour agreement in coming days as the 2002-2004 accord expires on 31 December.

Under the prior agreement, Spanish trades unions were persuade VW to halt 590 redundancies by agreeing to more worker flexibility.

Ivan Castano

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