VW outsells GM to be top carmaker in China

Volkswagen's first-half sales rise 18 per cent, easily beating US rival to extend hold as top-selling foreign brand in its biggest market

PUBLISHED : Saturday, 12 July, 2014, 12:52am
UPDATED : Saturday, 12 July, 2014, 12:52am

Volkswagen outsold General Motors in China in the first half of the year, keeping it on track to extend its reign as the best-selling foreign car company in the world's biggest vehicle market.

VW's sales in China, including Hong Kong, rose 18 per cent to more than 1.8 million vehicles, the company said yesterday. That compares with GM's 1.73 million units, an 11 per cent increase. In 2013, the German carmaker outsold GM in China for the first time in nine years.

China is the biggest market for both VW and GM and key to the three-way race with Toyota Motor for the global sales crown. To win more sales from the projected 1 billion drivers within a decade, VW chief executive Martin Winterkorn this month announced the company will build two more plants on the mainland, increasing its total investment to more than €20 billion (HK$211.16 billion).

"Volkswagen is gaining market share as their vehicles hit the market right at the bulls-eye," said Jochen Siebert, managing director of researcher JSC Automotive Consulting. "GM is not able to match that."

VW is planning to increase the number of models it sells in China to more than 100 by 2018, from 63 last year. It also plans to boost the number of dealerships to more than 3,600 from 2,395 outlets in 2013.

VW said in April it may sell more than 3.5 million vehicles in China this year and would probably exceed 10 million units in global deliveries four years earlier than previously planned.

The firm said this month that it will build two new plants in Tianjin and Qingdao with its partner, China FAW Group, making compact cars.

"China has become our largest and most important market," Winterkorn said. "To satisfy the demands of our customers in the country, we are engaging in a further substantial expansion of our capacities in China."

At stake is a market that GM has estimated may reach 35 million units a year by 2020.

The Detroit-based carmaker will also add production capacity to cater to rising demand, boosting the number of vehicles it can make a year by 65 per cent by 2020, GM China president Matt Tsien said in April.

GM will have five new plants in China by the end of next year, invest US$12 billion up to 2017, and introduce more than 60 new and refreshed models by the end of 2018, he said.

Siebert said: "Most of GM's models are at the end of the life cycle, so this year, they are a bit weak compared to Volkswagen on the product side."

China's passenger-vehicle sales climbed 11 per cent in the first six months of the year.