But Vahland, also executive vice-president of the Volkswagen Group, predicted car sales in China would grow at a slower pace of 7 to 12 percent this year, partly because less all-new models will be launched.

Carmakers will launch around 30 all-new models in China this year, down from 63 last year and 55 in 2005, according to figures he provided.

Vahland said Volkswagen Group expects to increase sales and profitability in China this year. But he declined to give detailed figures.

"For me, profits are more important than sales growth," he said.

The carmaker will launch a Skoda Octavia compact sedan at the venture with SAIC Motor Co Ltd this quarter and a Volkswagen Magotan medium-sized sedan at the other partnership with First Automotive Works Corp in May, according to the two ventures.

To generate more profits, Volkswagen Group will continue to cut costs in China, mainly through raising the ratio of locally made parts used in its vehicles, Vahland said.

According to Volkswagen's plan revealed earlier, it aims to cut China costs by 40 percent in 2008 from 2005.

"We will speed up our decision-making process in China as it is the world's most competitive and fastest-changing car market where more than 60 brands are contesting," he said.

Japan's Honda Motor said yesterday its China sales grew by a quarter to 323,469 cars last year.

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