VW closes in on Toyota as global auto leader

TOKYO Wed Jul 30, 2014 8:29am IST

The logo of German carmaker Volkswagen is seen at a VW dealership in Hamburg, October 28, 2013. REUTERS/Fabian Bimmer/Files

The logo of German carmaker Volkswagen is seen at a VW dealership in Hamburg, October 28, 2013.

Credit: Reuters/Fabian Bimmer/Files

Stocks

   

TOKYO (Reuters) - Volkswagen is closing in on Toyota Motor Corp as the global leader in vehicle sales, with a rapid expansion drive in China - the world's biggest auto market - while Toyota curbs growth to focus on shoring up quality.

Toyota, reigning at the top spot in the auto industry for two years in a row, announced relatively robust global sales growth of 3.8 percent for the first six months of the year to 5.097 million vehicles on Wednesday, a record first-half result.

But Volkswagen is growing faster and its half-year total could pull even with or even surpass the Japanese auto giant.

The Volkswagen group sold 4.97 million vehicles in January-June, up 5.9 percent from the same period a year ago, excluding figures from truck makers Scania and MAN that will be released on July 31.

IHS Automotive forecast Volkswagen's total first-half sales at 5.07 million vehicles including the truckmakers. The Toyota result, which the carmaker said reflected strong sales in the United States, China and Europe, exceeded the IHS forecast of 4.83 million.

Even if Toyota manages to retain its crown for the first half, its position looks less secure for the full year.

"China is the driving force of the global market, and the degree to which a company is focused on that region is linked to the global sales performance," said Yoshiaki Kawano, a Tokyo-based analyst at IHS Automotive.

General Motors Co, which Toyota overtook two years ago, said it sold 4.92 million vehicles in January-June.

Volkswagen, which sold 3.27 million vehicles in China last year, is planning to invest 18.2 billion euros ($24.4 billion) between 2014 and 2018 in new plants and products there together with its Chinese joint venture partners.

Toyota's China presence is much smaller with annual sales of 1 million vehicles, and while it plans eventually to double that it has given no time frame.

Toyota has put a freeze on the building of new plants until about 2016 and President Akio Toyoda has stressed that the company is focused on building better cars rather than chasing sales volume.

"Even if Toyota makes up its mind on potential investments soon, it'll be around 2017 when those plants can start operating," said Takaki Nakanishi, auto analyst and CEO of Nakanishi Research Institute.

Nakanishi expects Toyota to start announcing investment plans for new plants in the near future. It could open a new plant in Mexico, according to analysts and media reports.

Despite VW's expansion, profitability remains an issue, with its namesake brand's 2013 profit margin at 2.9 percent while Toyota's auto division achieved 8.8 percent and Hyundai Motor Co stood at 9 percent. Much of VW's production is in its home market of Germany, where workers secured a significant pay increase last year.

The Volkswagen group's brands include Volkswagen Passenger Cars, Audi, Porsche and Skoda [VOWGK.UL], among others. Toyota includes the Toyota brand, Lexus, Scion, Daihatsu and Hino. ($1 = 0.7445 Euros)

(Additional reporting by Maki Shiraki; Editing by Edmund Klamann and Stephen Coates)

  • Most Popular
  • Most Shared

DEFENCE

REUTERS SHOWCASE

Canonisation

Canonisation

Pope declares sainthood of two Indians, four Italians.  Full Article 

Stake Sale Strike

Stake Sale Strike

Coal India trade unions call off strike in victory for Modi.  Full Article 

Markets Weekahead

Markets Weekahead

Ride the bull with a finger on the ejector button.  Full Article 

Arms Purchase

Arms Purchase

India approves $2.6 bln mounted gun purchase - official.  Full Article 

Interview with Bulgari CEO

Interview: Bulgari CEO

Bulgari CEO: we shouldn’t have left India so we’re back  Full Article 

Formula One

Formula One

Hamilton takes second F1 title in style.  Full Article 

Available For Remake

Available For Remake

Bollywood finally wants to pay the price for remakes  Full Article 

Davis Cup

Davis Cup

Vintage Federer seals first Davis Cup for Switzerland.  Full Article 

Movie Review

Movie Review

"Happy Ending" is old wine in an older bottle  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage