Russia to be Europe's biggest car market in 2009, says Volkswagen CEO

The comments from VW CEO Martin Winterkorn jibe with those of GM Europe's finance chief, Luca Maestri, who told Reuters recently Russia could become Europe's second-largest car market next year.

Winterkorn said demand for new cars is expected to rise in Eastern Europe next year, while Western Europe should stagnate due in part to continued weak sales in Germany.

He also said the planned annual output at Kaluga, 150,000 vehicles, should be matched by its Indian plant in Pune, in the western state of Maharashtra, once it starts early next year.

Winterkorn added that talks with troubled Malaysian carmaker Proton on cooperation in the southeast Asian market, including a possible equity stake, were definitively over.

"I don't want this anymore," he said.

The VW CEO reaffirmed management's aim to boost productivity by 10 percent annually, although he plans to keep staffing levels in its six western German plants stable.