VW raises sales goal as subsidies spur demand

Volkswagen AG, Europe's largest carmaker, raised its full-year sales forecast after government subsidies helped spur demand for Golf and Polo compact models.

Deliveries may fall 5 percent this year, half the decline previously estimated, spokesman Michael Brendel said today in a telephone interview. Volkswagen has "good faith" of reaching the new goal following its first-half performance, Autogazette magazine cited Detlef Wittig, VW's sales chief, as saying in an interview that Brendel confirmed.

Sales have been stoked by a per-car bonus of 2,500 euros ($3,550) in Germany for trade-ins of vehicles aged nine years and older for scrap, part of a 5 billion-euro government sales- incentive program. Wolfsburg, Germany-based Volkswagen reported a 23 percent jump in Chinese sales in June as a 4 trillion-yuan ($585 billion) economic-stimulus package propelled demand, making the Asian country VW's biggest market for the first time.

"We will be able to compensate for a decline in German deliveries next year through other markets," Wittig said, adding that domestic industry sales may contract by 1 million vehicles in 2010 to 2.6 million units as incentives expire.

Volkswagen rose 9.03 euros, or 3.7 percent, to 252 euros in Frankfurt trading in the biggest gain since July 30. The stock has risen 0.8 percent this year, valuing the carmaker at 80.5 billion euros.