Volkswagen 2Q net profit up 35 percent

In the April through June period Volkswagen's net profit rose to 1.6 billion euros ($2.5 billion) from 1.2 billion euros in the year ago period, the company said.

Sales were up nearly 5 percent to 29.5 billion euros ($46.32) from 28.2 billion euros in the year ago quarter.

Operating profit rose to 2.1 billion euros ($3.3 billion) from 1.7 billion euros in the same period a year ago, Volkswagen said.

The Wolfsburg-based company recently reported vehicle deliveries in the first half of the year were up 5.8 percent to nearly 3.3 million worldwide, with especially strong sales in India, Russia and China.

"This shows that we are on the right track," said Martin Winterkorn, the company's chief executive, in a statement.

"The operating environment has become tougher and is demanding considerable efforts from the automotive industry. This does not make it easy for us. However, we are well positioned and have the right strategy to master the tasks ahead of us," Winterkorn said.

Volkswagen, which is Europe's largest automotive group, said that it is moving into new market segments and selectively expanding its product portfolio, but that the company will remain pressured by higher commodity and energy prices and the uncertainty about the duration and consequences of the mortgage crisis in the U.S.

"We therefore expect lower growth in the global automotive markets in 2008, compared with the previous year," the statement said.

The company still maintained that the Asia-Pacific, Central and Eastern Europe and South America regions will record the highest growth in demand for the group's vehicles.