VW Chairman Martin WInterkorn may get his wish of world domination seven years early.
Volkswagen’s ambitious Chairman Martin Winterkorn may get his wish a half decade earlier than expected, a survey of key auto analysts predicting that as we roll into the final months of 2011 the German company is poised to become the world’s largest automotive manufacturer.
That’s at least seven years ahead of VW’s original target for world domination – but the maker had an unexpected, if tragic, helping hand. Toyota, which had been the automotive king-of-the-hill for several years running, has been toppled by the Japanese earthquake and tsunami that crippled production for most of that country’s manufacturers for much of the past year.
General Motors, meanwhile, is also expected to push past Toyota, though it won’t regain the lead it held for three-quarters of a century thanks to the aggressive sales push by VW, according to a study by Bloomberg News.
That report predicts that sales will rise 13% this year for Volkswagen – which was the number-three maker for 2010 – to 8.1 million. General Motors will gain 8%, to reach 7.5 million. Toyota, meanwhile, will see sales slip by 9%, to 7.27 million, according to the analyst survey.
But that not remain the status quo – at least not for long if the Japanese automaker’s aggressive recovery plan gains traction. Forecasts by IHS Automotive, PwC Autofacts and J.D. Power and Associates don’t all agree on the 2012 picture. IHS foresees Toyota topping VW by as much as 500,000 units, though Power predicts the German company will retain its top spot by a narrow lead of 50,000.
While Toyota and GM officials continue to insist that being number one in sales is not their number one priority, that is a clear goal set out by Volkswagen, and the maker is taking a variety of steps to get there – though it originally was seen as the eventual payoff of an ambitious 10-year growth plan that runs through 2018.
Over the next five years alone it will spend $87 billion to boost annual production capacity to 10 million. And that figure doesn’t include another $20 billion that will be spent by the German maker and its partners at its Chinese joint ventures.
At the current pace, VW is now likely to reach that production target as much as three years ahead of schedule.
But analysts caution that Volkswagen’s ascendency is not an absolute. It has run into problems in several areas. In China, while it is growing fast it has been surpassed by General Motors, which hopes to double its own sales in the Asian nation by mid-decade.
Volkswagen’s ambitions in other Asian markets could be curtailed by a bitter squabble it is having with erstwhile partner Suzuki, which has accused the Germans of breach of contract. VW insists it wants to continue that partnership anyway – and it is under pressure to do so, Moody’s Investors Services warning a break-up could hurt VW’s credit ratings.
Toyota, meanwhile, might not admit its ambitions – and it’s clear CEO Akio Toyoda has to deal with other issues, including quality and safety snags – but the Japanese marque is targeting a 10 million production base, as well.
So, the coming years could see one of the most bitter industry dogfights in decades as the top three makers vie for world supremacy.