Reducing headcount in its plants has stung VW profits

Quarterly profits at Europe's biggest carmaker slumped by 92% from 282m euros (�189m; $357m) to 23m euros.

However, sales rose 7% to 25bn euros during the quarter, fuelled by healthy demand at VW's Audi and Skoda arms.

VW said redundancy payments, aimed at eliminating up to 20,000 jobs, were booked into the quarter, accounting for the sharp dip in profits.

Essential measures

VW agreed a deal to extend working hours without any increase in pay at six German car production plants in September.

The company plans to bring out 28 new models over the next two years and the restructuring process is crucial to its long-term plans.

The carmaker also said it wanted to increase its stake in truckmaker MAN.

MAN is pursuing Swedish rival Scania, which has already rejected a 10.3bn euro hostile bid.

VW holds a 15.1% share in MAN and has requested clearance from German regulatory authorities to boost this holding to as much as 30%.

This move is seen as increasing the pressure on MAN to reach a friendly deal with Scania and giving VW a greater say in the structure of any merged truckmaking giant.