Berlin - Shares in Europe's biggest carmaker Volkswagen AG slipped Friday despite the German-based company painting a positive sales picture and confirming its business outlook for the year.

Speaking to journalists Thursday, VW chief Martin Winterkorn said he expects the company's new model range to help bolster sales and to counter slumping US and European auto markets.

Winterkorn also went on to say VW was also drawing up plans to build a new production operation in South-East Asia.

He said the company expected a rise in group sales following the company's "product offensive" which includes new Scirocco and Polo models as well as a new model of its flagship Golf.

"The Golf VI will be a commercially successful model," Martin Winterkorn9s told journalists Thursday.

The VW chief also went on to say that the company was planning a new small family car model. However, VW shares slipped Friday, dropping more than 1 per cent in late morning trading to about 185 euros (293 dollars).

But while the group is retaining its sales forecast for the year, Winterkorn also expressed concern about signs of the growing pressures facing the world auto market.

In particular, this included high fuel prices along with the continuing turbulence on financial markets. However, several of VW's rivals have already moved to revise down their business outlooks. Japan's Toyota as well France's PSA and Renault, have trimmed their sales forecasts.

Winterkorn said the company was at present considering sites for a new South-East Asian production facility, possibility in Thailand, Malaysia or Vietnam.

This follows the collapse of talks on a cooperation deal between VW and Malaysian carmaker Proton. (dpa)