NEW YORK – Volkswagen of America Inc. sales will grow as it introduces new models in the U.S., VWA President Gerd Klaus says.

But this year, Klaus is predicting a 2003-like performance in which VWA will deliver about 300,000 VW-brand vehicles and about 87,000 Audis here.

Still, he says "VW is gaining speed now," and he points to sales of the hot Golf R32, which "is flying out the door.”

Golf RS is hot seller, VW says.

Although he won’t forecast sales longer term, he says VW “will grow with new products.”

On tap is a diesel version of the Passat that Klaus expects will help boost sales of that model.

"We now have diesels in every car line, except Phaeton," he says, predicting sales of 30,000 diesel vehicles this year.

Klaus says the opportunity for diesels here is enormous as a result of currently increasing fuel prices. He says diesels could rise above 10% penetration for VW, but notes realistically that demand in the U.S. won’t reach 20% of the mix anytime soon.

"We think diesels are better than hybrids," he says. “We're going to push diesels, but I don't see it matching European diesel sales here."

Klaus says the Phaeton luxury model is "selling alright" in the U.S. He voices confidence VW will meet its now modest target of 2,500-3,000 units per year of the most expensive car the brand ever has offered. Volkswagen AG CEO Bernd Pischetsrieder earlier said half of Phaeton volumes were earmarked for the U.S. The Phaeton plant has capacity for 30,000 units annually. (See related story: VW Faces Tough Transitional Year Ahead)