• Apr 17, 2009
Over the last several years, few automotive stories have held as much interest as the global fight between Toyota and General Motors for worldwide sales supremacy. Don't look now, but there's a new combatant hailing from Germany ready to take the reigns: Volkswagen. However, VW's ascendancy has less to do with the German automaker's output -- GM and Toyota are shedding sales at a much faster rate than VW.

Toyota – currently the undisputed leader in automotive sales volume – is expected to post about 1.23 million sales in the first quarter of '09, down an amazing 47. We're not yet sure where General Motors will fall in the rankings, but it seems likely to come in third place. What's caused VW's rapid rise in global prominence?

The two largest markets for Toyota are the United States and Japan, and vehicle sales in both countries have been some of the hardest hit by the global economic downturn. In contrast, VeeDub is very strong in Germany, China and Brazil, and, in attempt to boost new car sales, these three countries have recently implemented vehicle scrapping schemes. It's worked, and VW is reaping the rewards.

Of course, if there's one thing that General Motors and Toyota have proven over these last few years, it's that life's not easy at the top. It should prove interesting to see if VW can manage to maintain the market share that it's so recently inherited. Thanks for the tip, Axel!

[Source: Reuters]


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  • 34 Comments
      • 5 Years Ago
      Wow this is kinda crazy...when VW announced that they were going to become #1 in the world a few years ago everyone thought it was a ridiculous claim, but I guess since they had almost no exposure to the US and Japanese markets they became #1 just because their competitors lost half their sales.
      That said, their grip on China and Brazil isn't iron-clad, so their stint at #1 might be fleeting. But still, this is crazy.
        • 5 Years Ago
        While they definitely have a deathgrip on their homeland of Germany with both Audi and VW, if they had been as successful in the US market as they were back home they'd be bleeding money like everyone else because they'd suddenly be out of a lot of sales.
        Their also pretty lucky that they're so closely affiliated with German government...they're quite protective of them over there and I'm sure that helps a lot what with the incentives and all.
        Either way though, a lot of fortuitous timing for VW-if they had expanded into the US earlier with all those factories they planned to build they'd have a real problem on their hands.
        • 5 Years Ago
        Zamafir - Agreed. However, it would be also in their interest to make in-roads into the North American markets. It may be currently in recession but it will bounce back big-time and the population growth is also higher here than in Europe. The GDP of the US/Canada is still among the top and purchasing power is strong. Heck...here in Canada the recession isin't as bad and people are buying vehicles like crazy. I've seen a couple of Tiguans running around but they are out-numbered by Q7s!!! lol.

        Japan...umm...can anyone sell anything there if they aren't Japanese/super-luxury marques?
      • 5 Years Ago
      Well I like this whole shuffling keeps things interesting and competitive.
      • 5 Years Ago
      Quattroporte sounds right, VAG world wide, not just vw. Which would explain the numbers, given how well audi's dominating bmw in germany right now.
      • 5 Years Ago
      Many Americans think the world revolves around America, while in fact, there's 5 Chinese for every American. We only represent 5% of the world population, and many others are making a living equal or better to ours.
        • 5 Years Ago
        Don: It is quite obvious that the world does revolve around America, too much so. Just look at the current economic crisis. Standard of living has more to do with it than population of a given country.

        Thanks to the greedy barons in the financial world, the US spent the last 20 years exporting her industrial / economic wealth.

        There is a direct connection between the rise of India as an economic entity and the fact that companies like:

        CitiGroup, JPMorganChase, Dell, Microsoft, IBM, Bank of America, Google, HewlettPackard, Cisco, Apple etc., the list goes on and on, all exported thousands of jobs to India. The gap has been narrowed, raising theirs while lowering ours.

        It will take a lot of forward thinking, to move the US in a different direction. Those jobs are gone, not coming back. We have to create new industries if America is going to recover. Or, we can hold tea parties and hope that things get better all by itself.
        • 5 Years Ago
        @Ken,

        Don't worry dude, you don't need any help looking bad.
        • 5 Years Ago
        @Dude

        Really? You're going to bash someone for for a minor grammatical mistake when English probably isn't their first language? Or did that not occur to you? Which of course proves the point in Don's first sentence. Just do us all a favor and don't appoint yourself "Defender of America". You are making the rest of us look bad.
      • 5 Years Ago
      VW's success is because they were smart enough to diversity their market, whereas Toyota (and Japan's industries in general) keep stupidly attaching themselves to the USA market nearly to the exclusion of others.

      My best friend is a marketing consultant who advised Toyota among many other companies over the past 5 years, and he consistently tried to point out (generally in vain) that Toyota's Achilles Heel was the way the company overrelied on the debt-riddled US. UK, and Australian markets-- sort of a microcosm for Japan in general, which is heavily attached to the United States and way over-invested in US T-bills (to the exclusion of other currencies and wealth stores).

      To give one small example: Among Toyota's international sales and marketing force (based in Japan), a decent majority speak competent English along with their native Japanese. But almost none of them-- well less than 5%-- are proficient in any of the other big languages of critical markets, such as Chinese or German (the effective lingua franca of Central/Eastern Europe), let alone Brazilian Portuguese or South American Spanish, also markets that haven't been hit so hard by the recession. To the Japanese execs, it seemed, "international" was essentially tantamount to "English-speaking" (and the USA in particular), and that's precisely the debt-strained market that's been utterly throttled in Great Depression II. The Japanese companies (Honda/Nissan as well as Toyota) haven't taken the other markets seriously enough-- whether in language or other respects-- and they're paying a dear price for it, which is only going to get worse.

      In stark contrast, the international sales/marketing team at Volkswagen is truly international, as he found out. Their members do a much better job specializing in a variety of regions and learning the relevant languages. Thus in addition to their native German (already an enormous market in Central and Eastern Europe) and many of course speaking English, the VW sales force has armies of people able to communicate and market in Chinese, Russian, Hindi, Portuguese, Spanish, French, even Japanese in Toyota's own backyard. VW's reach is therefore truly global, and they were brilliant to get such a strong foothold in the BRIC countries right off the bat-- especially in China, India and Brazil.

      It seems that more than a few consultants have been trying to communicate this to the top brass at Japan's companies, but this only works if they're smart enough to listen. One only needed to look at the dangerous debt levels in the USA and Britain to realize that any company would need better diversification out of these markets to be in decent shape. Those that failed to take the hint are now suffering the consequences, and it's not going to get much easier for quite a while still.
        • 5 Years Ago
        Your points would be valid if it weren't for the fact that Toyota does quite well in China-they outsold VW there last year although the new VW models have shifted it back in favor of VW this year (sales places have been going between GM and VW and Toyota and Honda really rapidly).
        And people in China often learn English too, so if a Japanese exec and a Chinese exec meet they might very well just converse in English.
        You can't really expect most execs to know all these languages anyway, these guys are usually like 40-70 years old, and back when they were learning their languages China wasn't exactly a world superpower so they had little incentive to learn anything other than Japanese and English. I don't think it's hampered them too much either-the same guy who launched Toyota to success in the United States went to China and got Toyota's sales going there too even though he only speaks fluent Japanese and English.

        It's really hard to learn new languages once you're over a certain age, and it might honestly be less embarrassing just to hire a translator or have everyone speak in English than to mangle Chinese during business meetings.
        • 5 Years Ago
        There is no "South American Spanish" spanish is only one language, there may be different accents but if you know spanish, any spanish speaker will understand you regardles youre in spain, south america etc.
      • 5 Years Ago
      As PumaGTO (nice car!) said, I know of no "scrapping program" in Brazil. And I don't believe VW is the biggest here either. VW cars were always praised as "no maintenance", "low cost maintenance" and like. A cheap VW car in Brazil is the same as money. Old VW cars has more market value than Fiat or GM/Chevrolet. BUT this tendence is down. The (not so) new FIRE motors from Fiat eat the old AP1600/1800/2000 motors from VW. An ex-girlfriend of mine had a Fiat Palio who did 17Km/L (!!!) and most new VW cannot go even near 12Km/L. The internal quality is a bad joke! Everything is made of (cheap and possibly recycled) plastic and the "premium" versions make a lot of noise. The G4 gol (the rabbit descendant) is a real bad joke, a car so ugly that they had to completely redraw the BX line (Gol, Parati, Saveiro, Voyage) from scrap.

      I don't like ANY VW cars made in Brazil. And the only VW car I'd buy is the (imported) Jetta. Toyota and Honda cars runs rings around VW cars. For me, VW is pure crap.
      • 5 Years Ago
      Congrats VW.
      • 5 Years Ago
      The thing is, VW has a very strong presence out of the US; being market leaders in China, which is world's largest automarket. They are set to sell more VWs in China than in their home country Germany. As the article mentioned, they are also strong in Brazil, where sales have not slumped like in the rest of the world.
        • 5 Years Ago
        Quality is the control of the owners. I have owned many vws and with maintainance they have been trouble free. No big issues. We service ours regularly and i keep an eye out for tsb's for free checkups. I know others who constantly have problems but treat their cars like crap. I don't care how a brand ranks. Youth drivers don't always take care of things.

        VW quality should go up now that maintainance is included. Broke students have no reason to not go in for fear of service costs. Will be less problems down the road.
        • 5 Years Ago
        They will fall, they will grow until they will fall under their own weight.Like GM.
        • 5 Years Ago
        I hope you're right MVP.

        GM was tops in sales worldwide for nearly 80yrs. If they are following in GM's footsteps, they'll be tops for longer than many of us will be alive. Good for them.

        • 5 Years Ago
        To bad they are second to last next to Suzuki on JD Power reliability ratings:

        http://www.jdpower.com/autos/ratings/dependability-ratings-by-brand/sortcolumn-1/ascending/page-#page-anchor
        • 5 Years Ago
        Forgot to mention Germany, where the Abwrackprämie (cash for clunkers) has revived the auto market. So, VW has a strong position in China, Germany and Brazil - coincidentally the few countries where sales haven't plummeted. It's not surprising that they beat Toyota and GM.
        • 5 Years Ago
        Scrapping programs in Brazil? Strange... Havent´heard of it. Anyway... In fact, Volks sells a lot here, but Toyota does aswell...

        The thing is that while Toyota is a "premium" brand over here (the Corolla costs about US$35.000), Volks sells cars for about US$12.000 like Fox and Gol: very poorly made, no airbags, no abs, no crippling zones, no quality interior whatsoever... Most of their sells comes from these two models, especialy Gol.
      • 5 Years Ago
      Yeah, maybe so, but they don't sell much at all here in the states. Kinda makes me giggle considering their dealers are the biggest scam artists in the industry.
        • 5 Years Ago
        Right, they don't sell as much in a foreign market, but they dominate in their domestic market. If our North American automakers could have followed that surprisingly simple model they wouldn't be in the position they're in right now. Keep giggling as two of the big three teeter on total collapse, the jokes on you.
        • 5 Years Ago
        > Right, they don't sell as much in a foreign market,

        This gotta be a joke, right? VW's sales in China alone are set to pass their home market in Germany.
        • 5 Years Ago
        zamafir

        just be cool, we are all here to discuss and Chill out .....

        tell the opinion and that's it. don;t make it "personal abuse"

        • 5 Years Ago
        All other brands have trustworthy people. Bad apples in every batch. Every brand has bad dealers.
        • 5 Years Ago
        "This gotta be a joke, right? VW's sales in China alone are set to pass their home market in Germany. "

        Pssst. That was a REPLY to the post above mine, within that context, "they don't sell as much in a foreign market" implies, that's right, North. America.

        Please note the implicit difference between "a foreign market" in reply to "here in the states" vs what you're fantasizing "all foreign markets" ;). It might also help to read my other comments which show an obvious understanding of the Chinese market significance. Unless you're a student of the fox news taking quotes so far out of context they no longer make sense school in which case, keep the bs at home.

      • 5 Years Ago
      some corrections that Volkswagen is only big because it is on strong markets....

      1. quartal 2009

      Russia...
      The whole russian market has dropped by minus 39%!!!!!!!!!! But they were able to grow against the trend and sell more car than the year befor +14.1% ... in Russia they are currently number 4.

      Brasil
      The whole brasil market was growing only 3.3% but Volkswagen has grown 6.4%, the Volkswagen Gol is the most sold car in Brasil.

      North America
      Volkswagen has grown in north america plus 3.7% and droped minus 19.3% on the US market were the whole market droped by minus 38.4%.

      Europe
      Volkswagen has grown to over 20.6% from 18.6% in 2008. That on all europen markets were all but three markets has droped dramaticly in sale numbers

      Asia
      the whole market droped in Asia by minus 8.9% but Volkswagen has grown by 2.9%

      11.0% of all cars sold world wide in the 1. quartal 2009 are from Volkswagen, compared to the 9.7% of 1. quartal 2008.

      • 5 Years Ago
      Reins! It's reins dammit!
      • 5 Years Ago
      If its true its good news!
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