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Wednesday, January 15, 2014, 08:46
Fast forward for VW in car sales league
By Li Fangfang

Fast forward for VW in car sales league

A Volkswagen vehicle is displayed at a car show in Haikou, Hainan province, in September. (Provided to China Daily)

Fast forward for VW in car sales league

China's vehicle market revived last year, surprising analysts with double-digit growth. The year also saw a reversal of fortunes for two global leaders, Li Fangfang reports from Detroit

As China's vehicle sales smashed through the 20 million-unit barrier in 2013, with 17 percent growth after two years of near-stagnancy, a tectonic shift took place with the toppling of the longtime industry sales leader.

Volkswagen AG, the largest vehicle producer in Europe - and the first to tap into the China market almost 30 years ago - regained the top spot in the nation's market from United States-based rival General Motors Co.

GM overtook Volkswagen in 2005 and held the top spot every year thereafter. But in 2013, VW sped ahead.

The combined sales of Volkswagen and its two joint ventures surged 16.2 percent last year to 3.27 million units, including about 214,100 imported vehicles (up 13.2 percent). It was the first time that VW delivered more than 3 million vehicles in a single country.

"Last year was a very successful year for us, and we intend to continue our growth in 2014. We are well-prepared for new challenges in China's auto market," said Jochem Heizmann, who's a VW board member and chief executive officer of Volkswagen Group China.

He stressed the group's focus on people in its plan for China, saying: "We will make quality customer service our top priority for 2014, bringing us even closer to our Chinese customers and achieving even greater performance in the market.

"Volkswagen is on the road to becoming the most people-oriented car company in China," Heizmann said.

In June, VW signed an agreement with its local partner Shanghai Automotive Industry Corp (Group) to enhance strategic cooperation, expand the capacity of their plant in Foshan, Guangdong province, and establish a new plant in Changsha, Hunan province.

The agreement was part of the German company's plan to invest 9.8 billion euros ($13.4 billion) in China by 2015, the largest investment plan in the world's biggest vehicle market.

Martin Winterkorn, chairman of VW's board, said that the company plans to establish seven new plants in China in the coming years. Those plants will help boost its local annual production capacity by more than 60 percent to 4 million units by 2018, when it aims to be the world's largest maker of vehicles.

Supported by strong demand for all of their major brands, GM and its joint ventures reported sales of a record 3.16 million vehicles in China in 2013. That was a gain of 11.4 percent, but it fell below the industry's 13.9 percent growth. The US company sold an average of one vehicle every 10 seconds and almost 9,000 each day in China.

"General Motors maintained good growth momentum in our company's largest market, despite a modest slowdown in demand for commercial vehicles," said Matt Tsien, president of General Motors China.

"We benefited from a broad portfolio of models and brands that are meeting the diverse needs of vehicle buyers across China."

Tsien spoke with China Daily at the North American International Auto Show, which runs from Jan 13 to 26 in Detroit. He said that "the position of No 1 or No 2 is not our focus right now. We are paying attention to offering more advanced products that perfectly meet the market and consumer requirements in China".

Tsien forecast an 8 to 10 percent annual increase in China's vehicle market in 2014, with GM's sales growth likely to be similar or a bit higher.

During the year, GM will launch 17 new or upgraded models to attract Chinese consumers.

"Some of them will help General Motors enter new segments," said Tsien.

He also said that the company sees great potential in the luxury vehicle sector, where its Cadillac cars are still competing for brand awareness as latecomers to the market.

He said GM is also eyeing China's booming sport utility vehicle segment, which accounted for more than 20 percent of total passenger vehicle sales in 2013.

GM has said that it will introduce 60 new or upgraded models in China by 2015. The total investment, along with its Chinese joint venture partners, will reach $11 billion by 2016, covering products, factories and staff.

In the US market, GM held onto top position in 2013, far ahead of Ford Motor Co and Toyota Motor Corp, with annual growth of 7.3 percent, while VW's sales dipped 7 percent to 408,000 units.

Winterkorn said that Volkswagen will invest $7 billion over the next five years to revive sales in the US.

Looking more closely at the China market, third place went to South Korea-based Hyundai Motor Group. It delivered 1.62 million Hyundai and Kia vehicles to Chinese consumers last year, which was a record high. That represented a year-on-year growth of 16 percent.

Japan-based Nissan Motor Co took fourth position. It said sales in China reached 1.27 million units, a 17.2 percent year-on-year improvement from 2012.

Fifth place went to Ford Motor Co. The US-based automaker sold 935,813 vehicles, up 49.3 percent.

Toyota - the largest automaker in the world - fell out of the top five in the mainland for the first time, even though it reported record sales in China of 917,500 vehicles, up 9.2 percent.

Last year was one of recovery for Japanese vehicle makers, who saw their sales plunge in 2012 due to Chinese drivers' anti-Japanese sentiment during the Diaoyu Islands territorial dispute. But analysts said that Japanese car companies' future in China is unclear, given the worsening Sino-Japanese diplomatic relationship.

Toyota Chief Executive Officer Akio Toyoda said earlier that the company can't avoid the effects of the bilateral relationship, "but we will try to offset the impact".

Toyota aims to sell 1.1 million vehicles in China in 2014. But that would still leave it far behind VW and GM in the world's most promising vehicle market.

Contact the writer at lifangfang@chinadaily.com.cn

 
 
 
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