VW Poised to Outsell GM in China for a Second Straight Year

According to Bloomberg news, Volkswagen AG’s CEO Martin Winterkorn signaled in advance of the Beijing auto show that the carmaker expected to sell ten percent more cars in China than last year bringing total sales to 3.5 million. The Chinese market is key to VW’s plan to become the world’s largest automaker in 2018 surpassing Toyota. As the world’s largest car market, growing at eight to ten percent a year, China is central to every car companies global future. GM was the leader for many years before VW took the crown in 2013. Ford, meanwhile, is playing catchup in China, but doing so quickly. They recently introduced the Lincoln luxury brand and are on pace to vault past Nissan and Hyundai to become the third largest company in China this year.

In Detroit, it became clear that OEMs see China as key to their future success. The economy may start to level out in the next decade or so, but as the middle class continues to grow, demand for personal automobiles will grow as well. VW’s success can be attributed to their attention to the demands of the market. Bloomberg points out that they have developed plug in hybrids and all electric vehicles for the Chinese market. As environmental concerns continue to creep in, it seems prudent for VW to be forward looking in the product offerings. Furthermore, VW is expanding its dealership network in China, planning to double it by 2018.

The race for China is in many ways a testing ground for any other market that might emerge in the near future. The Ford Chief Economist, Ellen Hughes-Cromwick, signaled that the next emerging market could possibly be Africa. At this point, considering its struggles with war, corruption and disease, it seems unlikely that Africa will experience the economic boom that China has seen. Nonetheless, Ford has its eye on Africa as a possible growth market going forwards. An African growth period would have profoundly positive affects on the global car market and would certainly provide even more demand going forwards.

Source: http://www.bloomberg.com/news/2014-04-20/vw-signals-it-will-outsell-gm-in-china-again-this-year.html

3 comments to VW Poised to Outsell GM in China for a Second Straight Year

  • Kade Kenlon

    It seems the most popular Volkswagen cars in China are the fuel efficient and low emissions cars. This is most likely a result of their pollution issues. Could this potentially be an area where Tesla may find tremendous success? If Tesla offered a cheaper car, they may be able to create tons of revenue in the Chinese market.

    If Ford is right about Africa, would a head-start in the region make them the global leader in car sales?

  • mayolj16

    It is clear that all car manufacturers want to be number one worldwide, the real question would be how they plan to do this. We learnt from Ford that there is no such thing as a global car, and that brands make different cars for each region in the world, then, would this be the key to VW success? China is a market distinct from all others, so building the right car might be the difference between becoming number one, or having loses if it flops.
    The people at VW will have to understand what the market wants and then build a car with those same price, style, technology, and fuel economy specifications, to reach their goal by 2018

  • Michael Barry

    I think it is almost inevitable that Africa will develop into a consumer economy similar to North America, Europe, and Asia. With constant population growth around the world, and improved communications I think it will be hard for any country or continent to keep from getting caught up in economic growth and development. I think that the most likely scenario where the car market does not flourish in Africa would be if the economy doesn’t expand for a while and cars become technologically out dated.
    That being said, I don’t know if it would be beneficial for a company to set up in Africa now. I think the best bet might be to introduce a single luxury brand to the wealthier Africans, giving the poorer majority something to aspire to, and if they find themselves with money to spend in the future they might be more likely to use it to buy a car from this brand as a symbol having “made it”.

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