Volkswagen’s aim to topple Toyota from its current position as the leader in global vehicle sales is hotting up thanks to aggressive expansion in China, which is now seen as the world’s biggest car market. Meanwhile Toyota is going in the other direction by focusing on reducing its growth rate and improve the quality of its cars.
Toyota, announced robust global sales growth of 3.8 percent for the first six months of 2014 to 5.097 million vehicles, but Volkswagen is growing faster and its half-year sales could equal Toyota’s or even surpass it.
Volkswagen and its subsidiaries sold 4.97 million vehicles in January-June, up 5.9 percent from the same period a year ago, sales were strong in the United States, China and Europe
In China vehicle deliveries climbed 11 percent to 9.6 million in the first six months of the year, the region is Volkswagen’s strongest market and deliveries rose 18 percent to more than 1.8 million. Toyota, which fell behind Ford in China last year, boosted half-year sales by 12 percent to 465,900, according to the company.
Last year Volkswagen’s China total sales accounted for 3.27 million vehicles, VW is going ahead with a 18.2 billion euros ($24.4 billion) investment to build new production plants to build China specific products.between 2014 and 2018
Toyota has no new plans to build more production facilities in China, 2016 is being mooted as the beginning of a new expansion phase, Toyota’s President Akio Toyoda has revealed that the company is now moving to a different ethos in building better quality cars rather than aiming for volume sales.
Toyota is outpacing VW in the United States, where SUV’s reign supreme and are expected to outsell sedans in the market for the first time. Rising deliveries of the new Toyota Highlander and Lexus GX drove U.S. market share gains as Volkswagen posted sales declines and pledged to introduce a mid-size SUV in 2016.
Toyota and Lexus SUV models outsold Volkswagen and Audi by 7-to-1 in the U.S. this year through June, VW plans to add a seven-seat SUV to its lineup in 2016 and build the model at its Tennessee factory.
Toyota will soon invest in building new plants in the near future and could open a new plant in Mexico.
Despite VW’s expansion, profitability remains an issue, the group’s 2013 profit margin hovers around 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.