• Tuesday, March 05, 2024
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BusinessDay

VW passes GM in China for first time in nine years

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Volkswagen AG outsold General Motors Co. in China for the first time in nine years to recapture the lead among foreign automakers in the world’s largest car market.

VW’s 2013 deliveries in the country surged 16 percent to 3.27 million vehicles, the Wolfsburg, Germany-based manufacturer said weekend. Detroit-based GM announced earlier last week that the U.S. automaker sold 3.16 million cars in the country.

Beating GM in China puts VW a step closer to its goal of becoming the world’s largest carmaker by 2018. As the stakes escalate — both have announced combined investment plans totaling $36 billion in the country — they’ll be facing mounting competition from the likes of Toyota Motor Corp. and Hyundai Motor Co. at a time when the government is cranking up scrutiny on vehicle sales to combat pollution.

“Volkswagen will probably continue to grow more dynamically in China than GM,” said Frank Schwope, a Hanover, Germany-based analyst with NordLB who recommends buying VW shares. “It’s going to remain neck and neck.”

Unlike GM, VW counts Hong Kong in its tallies for the country. GM’s figures include light commercial vehicles.

While China may already be the world’s biggest auto market, the country has plenty of room to grow as the number of vehicles on its roads only account for about 6 percent of the population, versus 80 percent in the U.S. and 36 percent in South Korea.

Such opportunities prompted VW to say in November that it will invest 18.2 billion Euros ($24.9 billion) in China through 2018. That would help the company double the number of models produced in the country to more than 35, according to VW.

Among the biggest drivers for VW last year was Audi, the top-selling luxury car brand in China, as deliveries expanded 21 percent in 2013.

The company is counting on sales of the locally-produced A3 compact car to spur further gains this year. Porsche, which outperformed industry growth last year as Chinese consumers snapped up Cayenne SUVs and Panamera sedans, is counting on its new Macan SUV to drive growth in 2014.