VW's quest to beat Toyota runs through US

                                                                                                                                                                      Volkswagen is hoping to unseat Toyota Motor as the world's No. 1 carmaker, possibly this year. The company's success is likely to depend on its performance in the American market.

The German auto giant sold 10.14 million vehicles in 2014, achieving a 4.2% year-on-year sales increase and topping the 10 million mark for the first time. All of VW's passenger-car marques managed to lift sales from the prior year, though the total was still shy of Toyota's 10.23 million.

Market conditions were tough, but all brands contributed to the group's sales goal, CEO Martin Winterkorn said Jan. 11. He was in the U.S. to attend the North American International Auto Show that kicked off the next day in Detroit.

Among the global top three, Volkswagen's 21st-century sales track record stands out. Toyota and General Motors skidded in 2009, hit by the global financial crisis. VW, however, has a streak of sales gains stretching back to 2002.

Chinese drivers
Its solid sales growth has been driven by the expansion of the Chinese market. VW's sales in China climbed 12% in 2014, accounting for 36% of its worldwide total.

One of the first foreign carmakers to set up shop in China, VW now operates eight plants there through two joint ventures. The company plans to pour 22 billion euros ($25.2 billion) into its Chinese operations over the 2015 to 2019 period. By 2018, its output capacity in the country is expected to reach 4 million units a year.

Thanks to its dramatic growth in China, VW has roughly doubled its overall sales over the last 10 years. But as the Chinese auto market starts slowing down, the company must shore up its flagging U.S. operations and bolster profitability.

Weak stateside sales
The German automaker's performance in the U.S. has been lackluster. Its group sales there dipped 2% last year. VW-brand passenger cars were effectively the sole loser in the market, with sales dropping 10%. To turn the U.S. business around, the company aims to invest $7 billion by 2018.

In the meantime, the carmaker hopes to generate a buzz among U.S. motorists with its new plug-in hybrid SUV. The Cross Coupe GTE features a V-6 engine and two motors to deliver strong driving performance despite being a planet-friendly vehicle.

VW's highly fuel-efficient midsize sedan, the Passat, has failed to excite U.S. drivers. So with the new SUV, the company added power to appeal to American consumers. Although the new model will not contribute to sales until 2016 at the earliest, VW has high expectations for it.

During the unveiling of the Cross Coupe GTE at the motor show Jan. 12, Winterkorn described it as well-suited to the U.S. market.
As for the other challenge of lifting profitability, the strategy of using a single vehicle platform for multiple models "has not produced the expected results so far," according to a market analyst.

VW last year announced plans to cut costs by a total of 5 billion euros. "Requests for price cuts from Volkswagen have intensified since around last summer," said an official at a Japanese autoparts maker in Germany.

Source: www.asia.nikkei.com