VW’s jump ahead of Toyota comes with underlying weakness

VW’s jump ahead of Toyota comes with underlying weakness image

In a rather surprising turn of events, Germany’s Volkswagen AG managed to capture the interim half-year leadership position away from Japan’s Toyota, becoming the de facto ruler of the global auto industry.

This very long ambition has been achieved some three years ahead of the proposed threshold, but keeping the position as the world’s largest carmaker for the entire year might become an issue. That’s because the switch comes with underlying weakness and several issues, from the sliding sales in China – the worlds and VW’s biggest market to the feeble position it has in the Americas. And that turns VW AG into a company that is entirely dependent on the rather turmoil recovery seen across western Europe. The hunt for scale only makes sense if it boosts synergies, something VW hasn’t really been able to achieve,” comments Stefan Bratzel, head of the Center of Automotive Management think-tank. “Dependence on China is VW’s weak spot and managing such a large group inevitably poses problems.” Volkswagen has been pushing for a massive expansion since chief executive officer Martin Winterkorn started reigning eight years ago, adding new brands under the group’s umbrella and building more factories across the world while jumping sales in China.

Earlier this month the German conglomerate announced it had delivered 5.04 million autos around the world after the first six months of the year, with figures down 0.5 percent from the same period in 2014. Meanwhile, on Tuesday the largest Japanese company – Toyota Motor Corp. said it sold 5.02 million vehicles between January and June, down 1.5 percent on the level achieved last year.

Via Reuters

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