Volkswagen AG, Europe's largest carmaker, blamed falling sales in China as one of the main causes behind its third consecutive decline in annual profit worldwide. China remains VW's second largest market after its home country of Germany, but it has seen its market share in China cut by almost half over the past five years as rivals GM, Honda and Toyota have ramped up production and cut prices. In 2004 VW's China sales dropped 6.1% to 655,118 vehicles, while sales in the industry grew 15%. VW says it remains committed to spending US$7.7bn expanding factories to double production in China, and seeks to maintain market share of about 20 percent.
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