Volkswagen's China sales

-

 Volkswagen's China sales set to eclipse Europe in 2017

But German automaker relies on single market amid struggles elsewhere

YU NAKAMURA, Nikkei staff yearwriterVolkswagen's sales in China are poised to surpass those in Europe this year.

GUANGZHOU -- You don't have to look far to see a Volkswagen on the road in China, where the German company has regained the top market share. But the automaker's growth in this country also entails risks as Volkswagen increasingly depends on this single market.

Volkswagen's Chinese sales could surpass those in the automaker's home base of Europe in 2017. The company sold only about 270,000 more cars in Europe than in China last year for the 11 months through November. China in November topped Europe, accounting for 42% of Volkswagen's global sales.

The automaker's sales in China grew by 12% on the year in January-November, while sales in Germany inched up only 0.4%. Volkswagen's sales fell 4.5% in the U.S., where the company's emissions-cheating scandal originated. China is compensating for Volkswagen's slump elsewhere as the brand remains sullied.

The sales figures show that Volkswagen has driven past rival General Motors to reclaim the top spot in China, which it relinquished to the U.S. automaker two years ago.

China surpassed the U.S. to become the world's largest car market in 2009, making the country a major battleground for the world's leading automakers and a vital market for Volkswagen.

Luck has favored Volkswagen in China. Sales dipped temporarily when the former chairman of the company's Chinese partner automaker FAW Group was snared in President Xi Jinping's anti-corruption campaign. But China's government introduced large-scale tax breaks on small cars in October 2015 to stimulate the economy. Those tax breaks cover cars with engines 1.6 liters and smaller, of which Volkswagen offers many choices.

Yet Volkswagen's reliance on China is a risky global strategy. The company will surpass Toyota Motor to claim the top global share for 2016. But the German automaker depends on China for over 40% of sales, compared with around 10% for Toyota, as the Japanese company maintains a far more balanced business in North America and Southeast Asia.

Comments

Post a Comment

Popular posts from this blog

China suspends North Korea from coal importation

-
Image
China piles pressure on North Korea by banning coal imports 18 February 2017   From the section China Share Image copyright GETTY IMAGES China is suspending all imports of coal from North Korea as part of efforts to increase pressure on the country over its latest missile test. China's commerce ministry said the ban would operate until the end of 2017. It follows reports last week that China had rejected a shipment of North Korean coal worth $1m (£806,000; €942,100). The ban brings China, North Korea's only ally, closer to fully implementing tough sanctions aimed at stopping Pyongyang's nuclear weapons programme. Coal is North Korea's biggest export, with its shipments to China a mainstay of the country's fragile economy. The latest development comes just days after the suspicious killing  of the North Korean leader Kim Jong-un's half brother, Kim Jong-nam, at an airport in Malaysia. Kim, who was largely estranged from his...
Read more

A powerful cyclone carrying winds has made landfall in Queensland, Australia

-
Image
A powerful cyclone carrying winds of up to 263km/h (163 mph) has made landfall in Queensland, Australia. Cyclone Debbie, a category four storm, has left at least 45,000 homes without power and damaged buildings, although it is too early to say how many. PM Malcolm Turnbull told parliament he had activated a disaster response plan. More than 25,000 people were urged to evacuate their homes ahead of predictions the cyclone would be Queensland's most damaging  since 2011 . The system is expected to remain for several hours after crossing the coast between Bowen and Airlie Beach. In pictures: Debbie makes landfall "We are in for a long, tough day," said Queensland Premier Annastacia Palaszczuk. "The intensity and ferocity of the winds is going to be gradually increasing. Everyone is bunkered down." Image copyright EPA Image caption Cyclone Debbie could be the most powerful storm to hit the area since Cyclone Yasi in 2011 Electricit...
Read more

Kim Jong-nam killing: Suspect 'was paid $90 for baby oil prank'

-
Image
15 minutes ago   From the section Asia Share Image copyright EPA Image caption Siti Aisyah "met some people who looked Japanese or Korean", Indonesian officials said An Indonesian woman arrested for the murder of the half-brother of North Korea's leader has said she was given 400 Malaysian ringgits ($90; £72) to carry out a prank. Indonesian embassy officials met Siti Aisyah, 25, on Saturday in the Malaysian capital. She said she was given the cash to smear Kim Jong-nam's face with "baby oil" as part of a reality show joke. Tests show Mr Kim was killed with the highly toxic nerve agent VX. It is classified as a weapon of mass destruction by the United Nations. Unravelling the mystery of Kim Jong-nam's death Mr Kim died last week after two women accosted him briefly in a check-in hall at Kuala Lumpur international airport. Malaysian police have said that a sweep of the airport for toxic chemicals by a forensic team, the ...
Read more