VW overtakes Toyota as global sales rise

VW overtakes Toyota as global sales rise

image116970_bVolkswagen has overtaken Toyota as the world’s largest carmaker by sales in the first half of 2015, achieving its long-held ambition three years ahead of target.

The German group on July 17 reported 5.04 million deliveries in the first half year. By comparison, Toyota said on Tuesday it sold 5.02 million cars between January and June, a 1.5% decline on year-ago levels.

In New Zealand, Volkswagen had 369 registered new vehicle sales in June 2015 (down 10% year-on-year) and 2101 year-to-date (down 2% year-on-year).

The VW Golf was the top selling model for the local VW distributor in June 2015 with 111 registrations (equal with the Kia Sportage for 20th place) a drop from June 2014 when 164 Golfs were registered to new owners.

Staying on top globally will be a challenge for the German maker of the Golf and Polo, as deliveries are falling in China, which makes up for a third of its global sales, making it overly reliant on relatively stagnant western European demand.

“The hunt for scale only makes sense if it boosts synergies, something VW hasn’t really been able to achieve,” Stefan Bratzel, head of the Center of Automotive Management think-tank told Reuters.

“Dependence on China is VW’s weak spot and managing such a large group inevitably poses problems,” he says.

VW has been pushing for greater scale under chief executive Martin Winterkorn’s eight-year reign, propelled by adding brands and factories and higher sales in China.

Toyota, due to announce first-quarter earnings next week, said sales were dragged down by a slowdown in emerging markets and increased taxes on mini vehicles in Japan.

VW’s rapid expansion has masked underperformance in the US and Brazil, where it has been slow to upgrade models and adjust its offerings to market trends, analysts told Reuters.

Although boosting market share and brand awareness, VW’s race for volume has triggered a costly proliferation of models and equipment, especially in its core passenger-car brand where profit margins have languished amid growing inefficiencies.

With over 310 models and nearly 120 factories worldwide, VW’s size may be turning into a disadvantage, forming the backdrop to a leadership crisis in April when ex-chairman Ferdinand Piech was ousted after publicly criticising CEO Winterkorn.

Wolfsburg-based VW last year started shifting its focus to boosting earnings quality to help fund growing technology needs and plant upgrades.

VW has a goal of “moderately” raising deliveries from last year’s record 10.14 million cars.

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