Volkswagen

It hasn't always been a smooth ride for Volkswagen investors, but last week they had some good news to celebrate.

The German car giant revealed 2006 profits had more than doubled and sales had leapt 12 per cent. It forecast further improvements for the current financial year.

The annual results beat expectations and the German markets reacted strongly, pushing shares in VW up 8 per cent to close on Friday at [euro]95.11 ([pound]63). It was their highest level since 1998.

VW, which promised that the "large" number of vehicles due to launch this year would further boost sales, has focused in recent years on turning around a poor performance. It has battled Germany's strident labour laws to cut costs and reduce the headcount, and deliver a range of new models. The results seemed to prove that the restructuring, led by former chief executive Bernd Pischetsrieder - who was ousted last year - was starting to pay dividends. The Audi division, for instance, posted its first profit in the US for five years.

Yet not all car makers enjoyed such as happy week: Daimler- Chrysler was dealt a major blow when various rivals ruled themselves out as potential buyers for its ailing US division. Those lining up to distance themselves included VW, Ford, Peugeot-Citroen, Renault- Nissan and Hyundai. Earlier this month, Fiat also said it had no interest in the business.

GM, meanwhile, remains in talks with Chrysler, and the lack of any competition is likely to strengthen its position. GM is interested in the Jeep and Dodge brands.

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