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World Full Year 2016: VW outruns Toyota to #1 despite dieselgate

Volkswagen China. Picture courtesy AP Photo/dapd, Nigel Treblin, File via finacnytrh.comThe Volkswagen Group has China to thank for its #1 rank worldwide.

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For the past decade, Volkswagen has obsessed about racing to the top of the worldwide sales charts, with the #1 world ranking being the center of its “Strategy 2018” plan that focuses on lifting volumes each year. Most analysts – including myself – thought this goal would have to be postponed for a while when the dieselgate emissions scandal erupted in September 2015. Yes it is now official. For the first time in its history, the Volkswagen Group is the world’s best-selling automaker, and this despite the “dieselgate” emissions scandal that has plagued it for over a year now. This is a ranking established with sales volumes, and 2016 saw the Volkswagen Group increase its worldwide sales by 3.8% to 10.312.400 units.

VW has managed to surf of the China sales boom without launching new SUVs. For how long? 

The German group has benefited from the continued recovery of the European market, even though it trailed the average growth there with just +4%, and managed to stabilise in North America (+0.8%) mainly thanks to Audi. But the main reason why VW is the largest carmaker in the world this year is a 12% gain in China – surfing on the tax breaks for smaller-engine vehicles but here too trailing the country’s overall growth – to 3.982.200 sales. This is almost as much as VW’s sales in Europe as a whole (4.206.500) and it means roughly 40% of the Volkswagen Group’s worldwide sales are dependent on the good health of one country.

The Kodiaq will boost Skoda sales further up in 2017. 

Brand wise, the Volkswagen brand ends the year just below 6 million units and a reasonable 2.8% growth rate, one point below Audi at +3.8% to 1.871.300 sales which places the brand as #3 in the luxury race below Mercedes and BMW. Porsche (+5.6%) and Skoda (+6.8%) do even better while Seat (+2.6%) marks a pause but should be revived this year by the first annual sales of the new Ateca SUV. All the while Skoda will enjoy a boost from the Kodiaq that will also enter production in China.

The C-HR will boost Toyota’s worldwide sales in 2017. 

In contrast, Toyota Motor reported global sales of 10.175.000 units in 2016 (+0.2%), and global production of 10.213.486 units, both figures below Volkswagen’s for the first time. These figures include the Lexus, Daihatsu and Hino brands. 2016 puts an end to four consecutive years of worldwide domination for Toyota, which took the crown for the first time in 2008 when it ended General Motors 77-year reign as the world’s largest automaker. It was interrupted by GM in 2012 when production was disrupted by natural disasters in Japan and Thailand. Toyota’s worldwide strategy differs from Volkswagen which is focused mainly on volumes. Indeed, Toyota’s profit was more than double Volkswagen’s during the six months through September, according to data compiled by Bloomberg.

Seat will benefit from the Ateca’s first full year of sales in 2017.

There are a lot of uncertainties regarding the evolution of global sales for both manufacturers. According to Automotive News USA, Toyota must contend with possible trade tensions as U.S. President Donald Trump pressures foreign automakers to make more cars and trucks in the U.S. If this doesn’t affect VW as much as their US volumes are much smaller, the German carmaker, meanwhile, faces decelerating demand in China as the tax reduction expires and new crossovers are still a fair way from entering dealerships. Toyota is launching the C-HR small crossover in every corner of the globe in this start of 2017 which, if successful, could give the manufacturer a significant sales boost, especially in China where it trails Volkswagen as well as a handful of other Asian manufacturers such as Hyundai and Honda.

This Post Has 6 Comments
  1. China is the most important factor, but also Volkswagen lost less in the USA than GM and Toyota (in absolute figures). In europe VW lost market-share, but in absolute figures they gained more than GM and Toyota.

    So the development makes sense – despite dieselgate.

    The true surprise is the strong performance in China although VW does not offer enough SUV’s.

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