Dow Jones reports that Wolfgang Bernhard, head of the Volkswagen brand, said Monday that VW is a 'company in crisis' that must make major changes in its operations to regain competitiveness.

VW, which still builds the bulk of its vehicles in Germany, is 'not competitive exporting outside of Germany,' Mr. Bernhard reportedly said.

'If we don't change that we will lose our competitive edge,' Bernhard said in remarks on the sidelines of the Frankfurt motor show, according to Dow Jones. His comments come amid expectations that VW will seek substantial additional cuts in its German workforce.

Bernhard said the VW brand operation, the core of the larger VW group which also produces the Audi, Skoda, Seat and Bentley brands, must regain profitability within three years. 'We need to be out of the red in three years, globally,' he said. The VW brand had a first half operating loss. 

'It's a company in crisis. People need to understand that. They have to change,' Mr. Bernhard said to a crowd of reporters and camera operators who pressed in around him after he launched a new VW model, the Eos, which features an innovative power convertible top, Dow Jones reported.

Bernhard said VW plans to launch five to ten new models worldwide by 2010 to reinvigorate sales.