VW won't fuel all-new Astra

VW company sources have said Europe's biggest carmaker will bring forward launching the new Golf by a year to 2008, giving it a head start of a least a year over its main competitor. The current Golf was launched in 2003 and the Astra in 2004.

GM Europe President Carl-Peter Forster had stoked talk of a counterstrike by Opel when he told Germany's Handelsblatt paper he was keeping a close eye on VW's plans.

"When our main competitor feels compelled to bring forward its most important product, we watch that with interest," he was quoted as saying, although he added it would not risk eroding quality by acting hastily.

Franz said Opel would freshen the current version of the Astra to try to keep sales moving before the new model arrives.

Analysts say a new Golf in 2008 would put significant pressure on Astra sales. It would also let the Golf capture market share that Opel would have to fight to win back, said analyst Jens Schattner at Dresdner Kleinwort Wasserstein.

Lars Ziehn at WestLB said he suspected that VW would not bring out an entirely new Golf in 2008 but rather unveil a "big facelift" that nevertheless could hit Astra sales and put pressure on GM margins in Europe.

GM aims to break even this year in Europe, where it last made a profit in 1999. VW's move on the Golf could spice up negotiations at GM over where to build the next generation of Astra, a decision Franz said he did not expect before 2007.

Workers representatives are set to meet GM management in early April to lay out a timetable for the talks. Workers also want the talks to extend a job security pact whose future has been clouded by GM executives' recent comments.

Opel chief Hans Demant was reported as saying this month he could not rule out closing a plant when the new Astra comes on line. GM now builds the Astra in Bochum, Germany; Ellesmere Port, Britain; Gliwice, Poland; and Antwerp, Belgium.

GM Europe is in the process of cutting up to 12,000 jobs, nearly a fifth of its staff, but has stressed the need to keep cutting costs and boosting efficiency in a cut-throat market.