* VW CEO says crisis in automotive industry not over yet

* CEO sees increasing signs the bottom has been reached

* CEO says industry can be cautiously optimistic

* VW group deliveries up 9.5 pct in Aug, down 2.1 pct YTD

* Porsche chairman confident to conclude VW deal by 2011

The chief executive of Volkswagen (VOWG.DE), Europe's largest car maker, sees increasing signs for a recovery of the automotive market but cautions that the crisis is not over yet.

The difficult crisis in the automotive industry is not over yet, but there are increasing signs that the bottom has been reached, Martin Winterkorn said in a speech at an industry event on Monday.

The industry can be cautiously optimistic, he added.

Volkswagen was one of the main beneficiaries of the German car scrappage scheme, which ran out earlier this month and boosted national car sales -- particularly smaller models.

Winterkorn said VW's group deliveries rose 9.5 percent in August and were down 2.1 percent year-to-date. The global car market fell 14 percent in the months from January to August.

Volkswagen in August agreed to buy a 42 percent stake in the sports car unit of debt-ridden Porsche SE, for 3.3 billion euros ($4.80 billion) as part of a multi-stage deal to integrate the two companies by 2011.

Porsche Chairman Wolfgang Porsche told Reuters at the same event that he was very confident the deal with Volkswagen could be concluded by 2011 and that he saw no stumbling blocks.

The deal followed a marathon boardroom meeting in July in which embattled CEO Wendelin Wiedeking and his finance chief conceded defeat in a months-long power struggle with Volkswagen's powerful chairman and part-owner of Porsche, Ferdinand Piech. [ID:nSP513587]

Piech was also at the event, but did not want to speak to the press. I'm here to remain silent, he said. (Reporting by Christiaan Hetzner, Edward Taylor and Arno Schuetze)

Volkswagen