Volkswagen expects to lift profit margins over the next few years despite an expensive shift to electric cars and growing economic headwinds in Germany and abroad.

China has increased its ownership of German car group Daimler by investing a further $2.8bn (€2.5bn) in the Mercedes-Benz maker.

Volkswagen warned that it will take a huge effort to meet delivery targets this year, as the world’s largest automaker battles trade tensions and stricter emissions rules, while preparing to amp up digital investments.