HAMBURG - Volkswagen will likely complete the first stage of its planned integration with Porsche SE when it buys a 49.9 percent stake in the indebted group's profitable sports car business next week, VW said.

Volkswagen is already the most successful multi-brand group in the auto industry, VW Chief Executive Martin Winterkorn said in remarks prepared for VW's extraordinary shareholder meeting on Thursday.

Now, together with Porsche, we will climb an even bigger step to the top, he said.

Winterkorn is asking preferred shareholders to help fund the 3.9 billion euro ($5.89 billion) minority stake purchase, which will help Volkswagen boost profits as it looks to overtake Toyota (7203.T) as the world's largest carmaker.

Winterkorn warned that 2010 would be a very difficult year for the auto industry as a boom in small and subcompact cars runs out with the expiration of government-sponsored scrapping schemes.

French small car specialist Peugeot Citroen confirmed on Thursday it was in talks with Mitsubishi Motors (7211.T) to strengthen their relationship.

(Reporting by Jan Schwartz, writing by Christiaan Hetzner)