Since the beginning of the year, Volkswagen overtook Toyota Motor Corp in number of units sold worldwide turning the German auto maker into the world’s leading vehicle maker ahead of schedule.
On Tuesday, Toyota reported that it had sold 5.02 million units between January and June, while Volkswagen announced this month that it had sold 5.04 million cars during the same period. The German automaker planned to grab the worldwide sales crown by 2017.
Volkswagen’s market share is currently expanding mostly due to a boost in demand on the European market. The thriving business in Europe helped the company make up for the losses recorded in China, which is its largest market. Chinese demand for Volkswagen vehicles stalled as the stock market played on investors’ nerves, while the country’s automakers provided residents with cheaper SUV models.
The situation for the automotive industry is also bleak in other parts of the world. For instance, in Russia there’s barely any demand, in Latin America and South-East Asia sales are weak, while in the U.S. car sales rose just 4.4 percent since January. If the situation continues, the industry may see the smallest annual gain since the end of recession.
“The extent of the recent softness exhibited by many markets was not anticipated at the beginning of the year by either the companies themselves or by the market,”
noted Clive Wiggins, an industry analyst specialized in Japan market.
Wiggins believes that Japanese auto makers including Toyota need to cut costs and hope for currency gains if they want to meet annual earnings expectations.
In China, car sales slipped for the first time in a couple of years because of a weak economic growth and lower consumer sentiment triggered by the fluctuations on the country’s stock market.
Analysts expect that international automakers would slow down vehicle production aimed at the Chinese market rather than open new production facilities.
In China, Toyota managed to sell 512,800 vehicles in the first half and see a 10 percent gain. Volkswagen, on the other hand, sold 1.74 million units but saw a 3.9 percent decline.
Volkswagen’s Christian Klingler recently said that the company was not immunized against China’s economic fluctuations, and the “tense” conditions in Latin America and Russia. In Europe, however, a modest economic growth helped the German auto maker boost sales by more than six percent.
Europeans’ favorites are Porsche’s Macan compact SUV and Volkswagen Passat sedan.
Toyota sales also climbed in Europe, by 5.7 percent. But in the U.S. the Japanese car maker fares better against competition with a 5.6 percent gain, while Audi, Porsche and Volkswagen saw only a 2.4 percent boost.
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