VW report 80 percent drop in profits for 2009

Europe’s biggest car maker VW has reported an 80% fall in profits for 2009 partly due to a fall in profit margins.

The company made a net profit of 960m euros last year, but said it expected operating profit and sales to recover this year.

Sales slipped by 7.6% in 2009, but the company retains its ambition to become the world’s biggest car maker.

It is still doing well in economically-strong China, which is now its biggest market and the business is expanding in both Europe and the other Far Eastern markets.

Earlier this month, VW said it would buy a 20% stake in Japan’s Suzuki Motor for 222.5bn yen ($2.5bn; £1.5bn). Suzuki said it would take a stake in VW in return, spending “up to one half” of the funds it receives on VW shares.

Volkswagen is also in the process of buying Porsche.

It plans to issue up to 135 million new preferred shares to fund the purchase of that marque, along with the Porsche Holding dealership group.

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