VW threatens to overtake Toyota as number one

German giant’s sales set to beat Japanese rival
By Sarah Arnott

Saturday, 18 April 2009

Volkswagen is set to overtake Toyota as the world's biggest car maker,
despite sales falling by a fifth thanks to the dire state of the
global market.

VW sold 1.39 million vehicles across its nine major car and truck
brands in the first three months of the year, 11.4 per cent fewer than
last year. But as restricted finance and weak consumer confidence cut
a swath through car markets, the German giant has grown its share from
9.7 to 11 per cent.

By comparison, Toyota is in a parlous state. The Japanese group is
asking the government in Tokyo for up to $2bn (£1.4bn) in emergency
loans as it faces its first net loss in 59 years. Output has been
slashed – by a massive 53 per cent in February – and first- quarter
estimates predict that 1.23 million vehicles will be delivered, 47 per
cent down on last year.

Toyota overtook GM as the world's biggest seller only last year. But
its core markets in Japan and the US are some of the worst affected by
the global recession, while its German rival is benefiting from a 40
per cent market share in China and a broader range of brands. Toyota's
sales have dropped every month of 2009 in China, while VW's are up by
6 per cent.

Garel Rhys, at Cardiff Business School's Centre for Automotive
Industry Research, said: "VW is by far the leader in China, and China
has just passed both the US and Japan as the biggest single market in
the world. That is an amazing base load for VW and the proportion of
its sales accounted for by China is enormous."

The German brands – which include Audi, Skoda and Seat as well as the
main VW marque – are also holding up well in the EU. In western Europe
VW's market share grew by 2 percentage points to 20.6 per cent, and in
central and eastern Europe by 2.5 points to 12.9 per cent.

"GM's dominance for more than 70 years was built on the fact that it
had more than one bite of the cherry: if you didn't want a Chevrolet
you could have a Pontiac, or a Buick, or a Cadillac," Professor Rhys
said. "Toyota doesn't have that breadth, and that was always going to
be a long-term constraint. Although it owns Daihatsu and Lexus, that
is still not equal to VW."

Even in the US, which is one of Toyota's biggest markets, VW has made
better progress. More than 58,000 VW brands rolled off the forecourts
from January to March – nearly a fifth down on last year's numbers,
but a strong performance in a market down by 38.4 per cent. Toyota is
not the worst-affected supplier in the US, but with sales down by
about 30 per cent it is underperforming VW.

The German group has long had a target to overtake Toyota by 2018. But
it may be too soon to break out the champagne. "VW is certainly
capable of overtaking Toyota in the long term, but it may be a little
early to be sure this is more than a blip," Professor Rhys said.

Scrappage incentives introduced in a number of VW's major regions –
and being eyed by the UK Government – may also have helped. New car
registrations shot up by 20 per cent in Germany when the subsidy
started, pushing VW sales up by 4.5 per cent in the first quarter. By
the end of March, more than 160,000 vehicles had been ordered under
the scheme.

Detlef Wittig, at VW, said: "This demonstrates that the government's
measures are having an effect. At the moment, this is the best
programme for safeguarding jobs, protecting the environment and for
customers."

http://www.independent.co.uk/news/business/news/vw-threatens-to-overtake-toyota-
as-number-one-1670457.html