Volkswagen AG’s Audi luxury division said profit jumped 30 percent last year because of new models and sales growth in China and Eastern Europe.

Net income increased to 2.21 billion euros ($2.81 billion) from 1.69 billion euros in 2007, the Ingolstadt, Germany-based automaker said in a statement today. Revenue rose 1.7 percent to 34.2 billion euros.

“We managed to grow against market trends and are now much better positioned than competitors,” Chief Executive Officer Rupert Stadler said today at a news conference in Ingolstadt.

Audi’s sales increased 4.1 percent last year to a record 1 million vehicles, the 13th consecutive annual increase. Stadler reiterated at the Geneva International Motor Show a week ago that Audi aims to increase deliveries to 1.5 million and expand its lineup to 40 models from 28 by 2015. The carmaker is forecasting a 10 percent decline in its vehicle sales in 2009, slower than a 15 percent car-market drop.

“We’re adjusting production over the short term to keep inventories low,” Stadler said today, adding that all spending that isn’t relevant for production will be reviewed.

Volkswagen rose as much as 6.85 euros, or 3.3 percent, to 214.75 euros and was up 2.3 percent as of 12:33 p.m. in Frankfurt trading. The stock has fallen 15 percent this year, valuing Wolfsburg, Germany-based Volkswagen, Europe’s biggest carmaker, at 65.9 billion euros.

Audi attracted customers with a new version of the A4 sedan, its best-selling model, the introduction of the Q5 compact sport- utility vehicle and facelifts of the A3 convertible and A6 sedan. Deliveries last year rose 17 percent in China, 18 percent in eastern Europe and 2.5 percent in western Europe, while falling 6.1 percent in the U.S.

Operating profit rose 2.5 percent to 2.77 billion euros, and pretax profit rose 9 percent to 3.18 billion euros, Audi said.

The division foresees a “significant” drop in earnings in 2009, starting in the first quarter, though Audi is still predicting a “clear” profit for the full year, Chief Financial Officer Axel Strotbek said at the press conference.

Shortened work hours, including cutbacks planned for April 13 to 17, are helping the division lower production by 12,500 vehicles, CEO Stadler said March 3. The company trimmed workdays from Feb. 20 to 27 at its two main factories in Ingolstadt and Neckarsulm, Germany, affecting 25,000 of its 57,000 workers.

Audi has imposed no hiring freeze and will add 150 positions by the end of March, Stadler said today.

Volkswagen said on March 2 that group net income rose 15 percent to 4.75 billion euros as revenue rose 4.5 percent to 113.8 billion euros. Volkswagen also predicted its worldwide market share will increase as new models partly offset the industrywide sales decline.

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Audi 2008 Profit Rises 30% On New Models

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