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The Globe and Mail

Volkswagen and Daimler enjoy booming demand

In this Feb. 24, 2011 file photo the Volkswagen logo is photographed at the company's headquarters at the Volkswagen plant in Wolfsburg, Germany.

Ferdinand Ostrop/AP/Ferdinand Ostrop/AP

Volkswagen AG, the world's third-largest car maker, reported a sharp rise in sales and Daimler AG arranged for extra shifts in a further sign they could be the main beneficiaries of soaring demand in Asia.

Companies like BMW and Volkswagen's Audi unit have ridden a wave of emerging market demand that has lifted retail volumes for most German car makers to record levels and expanded operating margins for their core industrial business into the double-digits.

Volkswagen said on Friday deliveries to customers in the first half jumped 14.1 per cent to 4.09 million vehicles across all eight of its car brands including Audi, more than double the 6.1 per cent recorded for the industry overall in the same period.

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"They're heading for a second-place finish at the end of this year," said NordLB analyst Frank Schwope, estimating Volkswagen would end 2011 with global sales of 8 million - between the 8.5 million for General Motors and 7.5 million for Toyota Motor Corp. .

Volkswagen steered clear of providing a retail volume target for the full year.

"We are ... confident we can perform better than the global automobile market during the second half of the year, thanks to our very convincing range of models," said Christian Klingler, group head of sales, in a statement.

Sales in the first six months were once more driven by China, the car maker's single largest market by far, where volumes rose 16.4 per cent to 1.11 million, and contrasting with the European market which remains under pressure.

Meanwhile Daimler said it would run extra shifts at its largest plant in Sindelfingen, where nearly 24,000 workers built more than 460,000 luxury Mercedes-Benz cars last year.

The number of Saturday shifts for C-Class assembly rose by 16 to 28 for the entire year, or roughly every other week.

Employees building the flagship S-Class saloon will also work an additional 11 Saturday shifts, bringing the total to 17 over the entire year.

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"The business is booming, our vehicles are in demand more than ever," said Mercedes production boss Wolfgang Bernhard in a statement.

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