Europe's carmakers are hoping for higher revenues next year, recovering demand and a positive reception for new models, despite the troubles that have dogged the industry this year.

Volkswagen AG's finance chief designate Hans Dieter Poetsch spoke to Auto News at the Frankfurt car show today (September 9th), and expressed confidence that his company 'will significantly increase operating profit in 2004' as well as sales.

VW and other high-volume producers such as Renault and GM's Opel arm are hoping that improved models will halt a profit slide caused by previously poor demand.

Invesco Asset management fund manager Gerald Roessel said 'people have already started to price in the economic recovery and what that means for car stocks.

'We are getting some positive signs from the carmakers, but the key will be the economy. At the moment that is looking promising but we will have to see how individual firms fare.'

Ford meanwhile has added its voice to the optimistic sentiments being aired, saying it was looking for a better performance in Europe in the second half of 2003.

However, some such as Peugeot spokesman Frederic Saint-Geours remained pessimistic and feared that the results would fail to materialize.

Mr Saint-Geours predicted a retraction of the Western European car market of between two and three per cent in 2003, although he refused to rule out a recovery even before the end of this year.