Mumbai: The fight for pole position as the world’s number one auto maker by deliveries just got fiercer with Volkswagen AG surpassing Toyota Motor Corp. in the first half of 2015.

Toyota on Tuesday said it sold 5.02 million vehicles in the six months through June; Volkswagen reported sales of 5.04 million earlier this month.

Deliveries declined 1.5% for Toyota and 0.5% for Volkswagen, Bloomberg reported.

The competition between the German and the Japanese auto makers has been stiff in key markets such as China and Europe.

However, it’s a different story in India. It remains to been seen if Volkswagen India, which addresses the volume car market and sells Polo and Vento among other models, will be able to outstrip Toyota in India.

As things stand today, it is a remote possibility. Here’s why.

Though both firms account for a small share in the passenger vehicle market in India, unlike Volkswagen, Toyota has an early-mover advantage and boasts better market share and volumes.

It sells thrice more than what Volkswagen sells in India. In the three months to June, Toyota sold 34,300 units as compared with 31,403 a year ago, whereas Volkswagen sold 11,788 units as compared with 8,769 units last year.

Volkswagen India’s market share of 1.80% too pales in comparison with Toyota’s 5.25%. Helped by a competitive product development strategy and a raft of new models planned for India from 2016, Toyota is likely to maintain its lead in India over Volkswagen.

On the other hand, high development costs have weighed down Volkswagen’s India innings. Moreover, a sharp focus on China and Europe, where it sells eight out of 10 models, is yet another reason why India operations have not received the management’s time and bandwidth.

In contrast, Toyota, which is globally diversified and not too dependent on a particular market, has not lost focus in an emerging market such as India. Some believe this will help the Japanese car maker have a more sustainable volume run compared with its European rival in India as well as globally, and it is only a matter of time before Toyota will edge out Volkswagen again.

A slowing economy in China, Volkswagen’s most critical market and one that accounts for more than a fourth of its volumes, offers more grist to the argument in favour of Toyota.

Also, besides China and Europe, the Wolfsburg, Germany-based automaker needs to diversify focus to other regions including South America, South Asia and Africa—both for markets and product development centres—for a sustainable volume run globally.

Close
×
My Reads Logout