Volkswagen (VW) was sticking with its planned merger with Porsche despite serious legal and tax hurdles, the German car manufacturer said yesterday as it reported profit jumped to e3.2 billion (R30.5bn) in the fourth quarter of last year.

The complex merger – in which Porsche would become one of Volkswagen’s 10 brands – was supposed to take place this year but has been held up by German prosecutors’ investigations of suspected market manipulations at Porsche and a lawsuit in the US.

The deal “is taking ever clearer shape”, Volkswagen chief executive Martin Winterkorn said at the company’s annual news conference.

“The preparations are going according to plan, Volkswagen stands as before behind the basic agreement and the merger with Porsche.

“However, there are still not insignificant tax and legal hurdles to overcome.”

Porsche initially tried to take control of Volkswagen but ran into financial difficulties, and Volkswagen turned the tables with a merger deal that puts it in the driver’s seat.

Volkswagen owns 49 percent of Porsche’s car making operations, and has an option to buy the rest. It is holding off completing the deal while German prosecutors investigate suspected improper share dealings at Porsche.

The Porsche holding must first issue new shares to reduce debt, and Winterkorn said that step “is still anticipated in the first half of this year”.

Meanwhile, Volkswagen’s net profit for the fourth quarter was boosted by an expanding global car market that lifted sales in the US, Europe and China. The figure compared with e257 million in net profit from the same period in 2009.

Revenue rose 22.5 percent in the quarter from a year earlier to e34.33bn.

Top contributors were the Volkswagen brand, which raised operating earnings to e619m from e225m a year earlier, and the Audi brand, which turned in e1.07bn, up from e43m.

Volkswagen’s other brands include Seat, Bentley and Skoda.

The company has already announced profit of e6.84bn for 2010, which it calls its most successful year ever. – Sapa-AP