At a meeting with top managers in Dresden yesterday, Volkswagen chief executive Martin Winterkorn warned of hard times ahead.

The automaker is performing well compared to its competitors, but it can still expect a 10% decline in sales next year. According to Automobilwoche, Winterkorn said that it simply cannot get much worse.

Volkswagen has postponed investment plans for the coming year because of the economic uncertainty. They will be reconsidered in March. Key investment areas will be energy efficient engines and smaller cars.

Winterkorn said he expected the global market to fall 20% in 2009 but that VW would outperform the market. A 10% fall means sales of just over 5m units in 2009 compared to 5.6m units in 2008 and 6.2m in 2007. Originally Volkswagen had originally planned to sell 7.45m vehicles in 2009.

Volkswagen sales in November were down 16.5% to 447,000 cars. Sales chief Detlef Wittig said that even China and Brazil were now seeing a weakening of demand.