Volkswagen says 'watchful' after drop in Q1 profits

German auto giant Volkswagen vowed today to remain watchful after seeing its profit swerve sharply downwards in the first three months of the current year.

"We're looking to the rest of the year with our usual realism and with great watchfulness," chief executive Martin Winterkorn said on presentation of VW's first-quarter report.

Winterkorn expressed confidence that, "despite all the economic imponderables, VW will gather momentum throughout the course of the year and grow faster than the overall market."

And the group was therefore sticking to its targets for an increase in the number of deliveries to customers, he said.

Revenues would also increase but, given the uncertain economic situation, VW's profit target was simply to match last year's levels, the CEO continued.

As reported last week, VW's net profit slumped by 38.2 per cent to 1.946 billion euros (USD 2.6 billion) in the period from January to March.

Operating profit fell by 26 per cent to 2.344 billion euros on a 1.6-per cent decline in revenues to 46.565 billion euros.

Customer deliveries, on the other hand, were up 4.8 per cent at 2.314 million vehicles worldwide.