Cars and Drivers

VW Plans To Overtake Toyota (TM) And GM (GM) In Worldwide Sales

Bold words. VW says that by 2010 it can produce 10 million vehicles and pass Toyota (NYSE: TM) and GM (NYSE: GM) as the world’s largest car company. According to the Times "To those who suggest that closing a 3m vehicle gap (Toyota produced 9.4m last year) is a very tall order, company management explains that, in 2006, the number of conventional passenger cars made by Volkswagen and Toyota was fairly similar – 5.2m for Volkswagen and 5.5m for Toyota – and that the difference is made up by 4x4s, “people carriers” and light trucks."

Volkswagen only recently introduced a full range of these multi-purpose vehicles. They will play an important part in its future growth

VW may find that things don’t go as planned. As a new entrant to the pick-up and SUV markets, the company will find global competition for not just Toyota and GM, but also Ford (NYSE: F), Nissan, and Honda (NYSE: HMC). Most large countries also have local car manufacturers who may not be anxious to give up a large piece of their business.

While VW may have a chance to get a reasonable piece of the auto sales in huge countries like China, it has almost no market share in the world’s largest car-buying nation, the US. Taking away business from a desperate company like Ford and a successful company like Toyota may be nearly impossible.

Douglas A. McIntyre

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