China passing Germany as VW's Top Market
21 August 2008
The Volkswagen group expects to sell more cars in China than Germany this year, making China the automaker's largest market.
Despite slowing growth in June, VW group -- which includes VW brand, Skoda, Audi and four other brands -- is on pace to sell more than 1.05 million units in China in 2008, slightly more than the number it will sell in Germany.
"The 1 million figure is still on," said J?rg Mull, executive vice president of the finance department for Volkswagen Group China. "The market will hit at least 15 percent growth this year, even though overall Chinese growth has slowed a bit."
According to VW's first-half financial results, the automaker sold 531,614 cars in China, up 23.2 percent versus a year ago. VW sold 534,390 units in Germany, an increase of 3.7 percent.
If both trends continue, VW officials expect China to top Germany by the end of the year.
"The Chinese market remains the driver of global growth, [along] with Russia and Brazil," Mull said. He was speaking in Beijing at an event to promote VW as a sponsor of the Olympic Games.
VW is the market leader in China with a 19.1 percent share. Following recent years of decline, the automaker has turned its business here into a profit center thanks to its Project Olympia restructuring.
Under Project Olympia, VW worked on its brand positioning, cost, sales and marketing and product lineup. VW will launch 12 to 14 new models in China in the next two years. Between 2005 and 2008, the automaker has launched 11 new models.
The automaker doesn't expect the pace of the total market to weaken anytime soon. VW officials forecast a doubling of the market within the next 10 years, from 5.6 million to 10.3 million by 2018.
Some analysts have downgraded their expectations for the Chinese market due to recent changes in government taxation and a general trend of slowing sales.
Morgan Stanley predicts a 12 percent to 15 percent increase in Chinese sales this year, down from an estimate of 22 percent earlier this year.
Source : english.chinabuses.com
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