Berlin  - Europe's biggest carmaker Volkswagen AG reported Wednesday a 35-per-cent jump in second-quarter earnings as demand for new models helped to offset surging fuel costs and growing economic uncertainty.

Net profit for the German-based auto group rose to 1.643 billion euros (2.58 billion dollars) compared to 1.22 billion euros posted in the same period last year, with key emerging economies expected to power the company's business growth during the rest of the year.

"This shows that we are on the right track," said VW chief Martin Winterkorn, releasing the results. "Our innovative products are meeting with an enthusiastic response from our customers."

The rise in second-quarter earnings followed a 4.5-per-cent increase in sales to 29.5 billion euros during the period with the carmakers having rolled out a series of new models such as the Tiguan sports utility.

Second-quarter VW group operating profit rose by 21.8 per cent to 3.4 billion euros, with the company expecting this year to beat sales revenue and operating profit it reported in 2007.

But despite the tougher conditions now taking shaping in the global car market, Winterkorn remained confident about the company's prospects for the rest of the year with sales buoyed by strong demand from the Asian-Pacific region, South America as well as Central and Eastern Europe.

"The operating environment has become tougher and is demanding considerable efforts from the automotive industry," said Winterkorn.

"This does not make it easy for us. However, we are well positioned and have the right strategy to master the tasks ahead of us," he said.

VW is moving into new market areas and selectively further expanding its product portfolio, the carmaker chief said. (dpa)