FRANKFURT -- Volkswagen plans no immediate action to offset the strong euro's bruising impact on profits, the boss of Europe's largest car maker said in an interview that appeared on Monday.
Asked when he planned to do something against damage to revenues from the euro's recent surge against the dollar, VW Chief Executive Bernd Pischetsrieder told Focus magazine,"in the near term, absolutely nothing."
"For years Volkswagen has hedged about 40 percent of dollar revenues. When the euro falls, as it did before, that's advantageous and when it climbs it has the opposite effect," Pischetsrieder told the magazine.
Despite seeing some 400 million euros shaved off first-quarter pre-tax profits due to the euro's strength, Pischetsrieder said there were no plans to build a plant in North America.
"We have enough capacity," he said pointing out that the car maker already produces its Beetle and Jetta models for sale in the United States in Mexico.
The comments follow recent speculation that Germany's car giants might seek to increase production across the Atlantic as a natural hedge against currency fluctuations.
Shares in VW have been harder hit than most European automakers by the euro's recent gains, with analysts pointing the finger at what they say is a conservative hedging policy compared with that of rivals.
Pischetsrieder said that while the tumble in profits in the first three months of 2003 should not be seen as representative for the year as a whole, the business environment in key markets had not improved in the second quarter.
"Western Europe and the German market remain at the weak levels seen last year and in the first quarter."
On legal steps by the European Union against a law which protects the German car firm from possible takeovers, VW's boss said the EU's Internal Market Commissioner, Frits Bolkestein, should take a more global view.
"He's ignoring controls -- such as the takeover laws in Pennsylvania and Indiana -- that frustrate takeovers and mergers. Or the multiple voting rights of the Ford family."
"Mister Bolkestein should be trying to change things in Washington. Then I'll talk to him again about the VW law."