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Volkswagen Group is the largest carmaker in Europe, selling vehicles under the Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda and Volkswagen marques. It also sells Ducati motorcycles and commercial vehicles under the MAN and Scania marques. The VW Beetle was its first bestselling model, and the Golf, launched after it stopped production of the Beetle, has become the third best-selling car of all time.

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VW battles with GM for top car sales in China

Foreign carmakers vie for 2013 sales crown in China, as Japanese companies struggle

PUBLISHED : Thursday, 27 December, 2012, 12:00am
UPDATED : Thursday, 27 December, 2012, 1:59am
 

Volkswagen (VW) will vie with General Motors (GM) for the sales crown among foreign carmakers in China next year, gaining share as Japanese carmakers led by Toyota Motor struggle to recover amid a territorial dispute.

VW, whose luxury Audi cars are popular with Chinese bureaucrats, has not led sales in the country since 2004 and will probably sell 2.7 million vehicles in the country next year to GM's 2.65 million, helped by eight new or revamped models including the Santana, Golf, Skoda Octavia and Audi Q3, according to industry researcher JSC Automotive Consulting.

GM's new offerings include the Cadillac XTS and three Opel models.

Passenger-vehicle sales on the mainland will probably accelerate and gain as much as 10 per cent next year, as a rebound in economic growth gathers strength, according to eight analysts in a survey.

Chinese leaders assuming power in a once-a-decade handover to be completed in March may introduce economic stimulus to increase domestic demand, Autoforesight Shanghai, LMC Automotive and Synergistics forecast.

"When the economy stabilises, Chinese consumers will have more confidence to buy cars," said Lin Huaibin, a Shanghai- based analyst at IHS Automotive. "A lot of indicators have shown economic improvement since September."

Foreign carmakers are stepping up their investments in China, counting on the world's largest pool of first-time car buyers to help offset declining sales in Europe. Total vehicle sales may surpass 19 million units this year, according to the China Association of Automobile Manufacturers on December 10.

Globally, Toyota is poised to take back the title of world's biggest carmaker for 2012, as VW fights GM for second place in the final week of the year.

In China, SUVs will remain the fastest-growing segment as it is "under-penetrated" and caters to the preference of Chinese consumers for roomier vehicles, while smaller cities will become more important for sales, said Steve Man, a Hong Kong-based analyst at Nomura.

The new leadership, led by Communist Party chief Xi Jinping, must decide the pace of market-driven change to boost consumer demand and balance the role of exports and investment.

China said it will seek a higher "quality and efficiency" of growth next year, and target "sustained and healthy development," Xinhua reported on December 16 after a meeting of senior leaders in Beijing.

"The new government probably doesn't want to start its tenure with a weak economy, so in China that usually means more investment spending," said Bill Russo, the president of Synergistics. "The commercial-vehicle segment could be a beneficiary of any economic stimulus as businesses replace products like trucks for construction projects."

Sales of commercial vehicles, which include buses and trucks, are down 6.8 per cent in the first 11 months of this year, compared with a 7.1 per cent gain in passenger vehicles, according to car association data.

The pace of sales may slow in China if more cities implement or tighten measures to control vehicle populations to curb pollution and traffic congestion.

By 2020, another 20 Chinese cities may exceed the car-density threshold of 250 vehicles a kilometre of road, according to management consultants McKinsey, which may prompt officials to impose similar restrictions to those in Beijing, Guangzhou and Shanghai.

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