Volkswagen poised to dominate Chinese car market in 2013

Article by Anita Panait, on December 22, 2012

Volkswagen is looking to become a dominant force in China’s car market in 2013, as it has been trying to prove this year. While VW’s feat may be linked to the current boycott of Japanese products like vehicles in China that started in September 2012, the truth is, the German carmaker has been doing a good job luring consumers away from Toyota, Honda and Nissan in the mid-sized car market.

VW’s sales secret is lodged within its advanced powertrain technology, including turbocharged direct injection engines and dual-clutch gearboxes. In fact, Volkswagen brand sales in China surged 31 percent in November 2012, while sales of Toyota, Honda and Nissan in the country dropped around 30 percent in the month.

Although Japanese carmakers are expected to recover gradually as anti-Japan sentiment in China recedes, Volkswagen is exerting its best efforts to dominate the Chinese car market in 2013. VW is making heavy investments to introduce new models, construct new assembly lines and open new dealerships.

VW’s group sales in China are expected to be at 270,000 units in November, just around 10,000 vehicles ahead of current market leader General Motors, which delivered around 260,000 units. For the January-November 2012 period, GM's joint ventures sold 2.59 million units in China, while VW Group sold 2.53 million units. While it seems that GM sold a little more than VW in China, over a million of the US carmaker’s sales have been low-margin Wuling microvans.

China's car market is headed for a stable growth in 2013, following four years of volatile swings. Typically, China's car market grows faster than its economy. However, the pattern was upset in 2008, as global economic worries caused Chinese buyers to become spendthrift. The pattern was poised to resume this year, as passenger vehicle sales increased over 10 percent in April-August 2012. But it was disrupted again when a territorial dispute between China and Japan broke out in September, leading Chinese car buyers to boycott Japanese vehicles.

Topics: vw, china

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