BackVolkswagen signals it will outsell GM in China for second straight year
German car maker forecast its sales in China will increase 10% or more in 2014
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Beijing/Shanghai/Frankfurt: Volkswagen AG forecast its sales in China will increase 10% or more in 2014, signalling the German auto maker will outsell General Motors Co. in the world’s biggest auto market for a second-straight year.
“VW expects double-digit growth in China from last year’s record, pushing deliveries to more than 3.5 million vehicles," chief executive officer Martin Winterkorn said in a statement on Saturday. Though he didn’t specifically refer to GM, which sold about 110,000 fewer vehicles than VW in China last year, the Detroit-based company said in February it would keep up with a market that’s poised to grow 8% to 10%.
For China’s two-biggest foreign auto makers, the competition is intensifying in the country and the battle-lines are shifting toward smaller cities as the economy slows and anti-pollution measures spread. That’s prompting companies from VW to GM to customize more car features catered to Chinese tastes and speed up the introduction of new models into the country.
“We’re certainly seeing cities in China place restrictions, there are pressures on the infrastructure, there are pollution issues," Finbarr O’Neill, president of J.D. Power and Associates, said in an interview on Saturday. “But as a whole, the growth throughout China in the tier 3 and 4 cities, in the west, and the aspiring middle class, assures continued growth for the automotive industry."
Dealer expansion
VW, the Wolfsburg, Germany-based car maker that owns a dozen automotive brands, is planning to increase its number of dealerships in China to more than 3,600 by 2018, up 50% from now, the company said. VW said it will also introduce a range of low-to zero-emission models to meet rising demand for such cars in the country, starting with the e-Up! and e-Golf this year, followed by models such as the Audi A3 E-Tron plug-in hybrid.
“We will intensify our customer orientation even further so that we can respond even faster and more flexibly to customers’ wishes, particularly here in China," Winterkorn said.
Outselling GM in China helped VW surpass the US auto maker as the world’s second-biggest car maker by sales last year. VW, whose businesses include the Audi and Porsche premium marques and the Skoda mass-market nameplate, said last month that it may sell more than 10 million vehicles for the first time in 2014, four years earlier than planned.
The German company will introduce more than 100 new or revamped models through next year in a strategy to overtake Toyota Motor Corp. as the global industry leader by 2018.
Close race
Still, VW lagged behind GM in China during the first quarter, according to figures released by the companies this month. GM, which had been the top-selling foreign auto maker in the country for eight straight years before losing that spot in 2013, saw first-quarter China deliveries rise 13% to 919,114, edging out VW’s 880,700 units.
GM will debut a redesigned Chevrolet Cruze sedan at the Beijing auto show, which opens to the public next week, picking China for the model’s global rollout. The Cruze, Chevrolet’s best-selling model in China last year, is one of the six new or refreshed models under the brand being brought to the nation this year by GM. The Detroit-based company is also showing 36 other vehicles at the show.
The largest US auto maker is spending $11 billion in China through 2016 to boost products and manufacturing capacity.
Among other global auto makers, Ford Motor Co. is bringing its premium Lincoln cars to China decades behind VW Audi and BMW, testing whether the second-biggest US auto maker can emulate the recent turnaround of its namesake brand.
Even though the company started producing cars in China in 2003, about two decades behind VW, the popularity of its SUVs and Focus cars helped Ford see a 49% surge in China sales last year, overtaking Toyota to become the nation’s fifth-largest foreign auto maker. This year, it’s on pace to overtake Hyundai Motor Co. and Nissan Motor Co. for third place. Bloomberg
Stephen Engle in Beijing contributed to this story.
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