By Liz White, UT staffAmberg, Germany-Seating and automotive interiors maker Grammer AG followed a second quarter sales increase with a further rise in the third quarter. Group sales for the vehicle supplier rose nearly 6 percent in Q3 to Euro 212.4 million. Sales for the first nine months increased 2.1 percent to Euro 639.8 million, despite a weak first quarter, the Amberg headquartered group said. In automotive, Grammer's sales rose 7.7 percent to Euro 142 million. This segment leads Grammer Group in sales volume, and in 2005, has been "heavily affected by new product launches for the high-volume BMW 3-series and the VW Passat." After VW's introduction in August of its high-volume Passat Station Wagon, Grammer said, it was able to increase production of interior equipment for the Passat to rated capacity. In its Seating Systems business, sales in Driver Seats increased by 7 percent in Q3 to Euro 61.4 million. The Offroad business (seats for construction equipment and agricultural vehicles) and truck seats contributed equally to this upward trend with good orders. Grammer said its smallest segment, Passenger Seats, had sales of Euro 10.5 million in the third quarter, Euro 1.2 million less than in Q3 2004. "This stagnation was due to persistently low demand in the bus sector as well as project postponements and cancellations in the train business," the company commented. Grammer Group reported operating profit (EBIT) of Euro 23.2 million for the first nine months (previous year: Euro 36.1 million). Three factors played a crucial role in the Group's performance: higher raw materials costs, particularly oil and steel; start-up costs for new products in the Automotive segment; and the weaker passenger seats business. And construction and commission and five new plants-two in China-led to additional non-recurring costs, Grammer added. Grammer has initiated operating and structural measures aimed at reducing costs and improving earnings over the short and medium term. For 2005 as a whole, Grammer said, it expects sales to at least reach 2004's level, but it anticipates lower profits than in 2004 due to the high cost of raw materials and extraordinary costs. "