Stuttgart - Luxury German sports carmaker Porsche AG said Wednesday it was postponing moves to boost its stake in Volkswagen AG after a surge in VW shares and signs that the global auto industry was facing tough times.

Porsche had planned to build up a stake in VW to more than 50 per cent this year.

But Porsche chief Wendelin Wiedeking told the group's annual press conference that in the light of "the current economic circumstances, it is increasingly unlikely that we can achieve this goal in this year" with the company also warning it expects a fall in revenue as the slowdown in the world economy gains momentum.

"Porsche cannot escape the severe slump in demand that it the entire automotive industry this autumn," Porsche said. "The company expects a fall in sales during its current 2008-2009 business year."

In particular, this is a result of a dramatic contraction in the US, which is Porsche's biggest single market, with the Stuttgart- based carmaker joining other leading auto groups in suspending production.

While confirming Porsche's plans to boost its holding in VW to 75 per cent next year, Wiedeking insisted that his company was in no rush to tighten its control of Europe's biggest auto manufacturer.

"We are under no time pressure," Wiedeking said. Porsche currently holds a 42.6-per-cent stake in VW. The German state of Lower Saxony currently has a 20 per cent stake in VW.

Porsche's announcement Tuesday helped to drive up both its shares and VW stock. By early morning Porsche's shares had surged by more than 8 per cent to 57 euros
(74 dollars) while VW was up more than 12 per cent at 286 euros.

Volkswagen shares raced ahead to more than 1,000 euros last month after it emerged that Porsche was planning to build up a holding of more than 70 per cent in VW.

However, Porsche's board member Holger Haerter said the carmaker was not prepared "to acquire Volkswagen's ordinary shares at an economically senseless price."

Porsche's decision to step back from raising its VW stake this year also comes amid signs of the growing pressure on German carmakers as they move to production cuts.

While VW said this week it was weighing up whether to cut output at its main German plant in Wolfsburg, the nation's other auto groups including BMW, Daimler, Audi and Opel have all announced plans to leave assembly lines idle during the Christmas-New Year period. Porsche has also introduced production cuts.

At the same time, BMW, which is the world's leading luxury carmaker, said it would trim an additional 400 temporary jobs at its operation in the east German city of Leipzig. The Munich-based carmaker has already announced moves to cut 8,100 jobs from its global operations. (dpa)