VW Signals It Will Outsell GM in China Again This Year

Volkswagen AG signaled the German automaker will outsell General Motors Co. and all other foreign carmakers in the world’s biggest auto market for a second-straight year.

VW expects China deliveries to rise at least 10 percent from last year’s record, pushing deliveries above 3.5 million vehicles, Chief Executive Officer Martin Winterkorn said in the run-up to the Beijing auto show, which opens to public on this week. Though he didn’t specifically refer to GM, which sold about 110,000 fewer vehicles than VW in China last year, the Detroit-based company said in February it would keep up with a market that’s poised to grow 8 percent to 10 percent.

“It’s a horse race,” GM China President Matt Tsien said yesterday in Beijing, when asked whether GM would be able to beat VW’s sales target.

For China’s two-biggest foreign automakers, the competition is intensifying in the country and the battle-lines are shifting toward smaller cities as the economy slows and anti-pollution measures spread. That’s prompting automakers to customize more car features catered to Chinese tastes and speed up the introduction of new models into the country.

“We’re certainly seeing cities in China place restrictions, there are pressures on the infrastructure, there are pollution issues,” Finbarr O’Neill, president of J.D. Power & Associates, said in an interview. “But as a whole, the growth throughout China in the tier 3 and 4 cities, in the west, and the aspiring middle class, assures continued growth for the automotive industry.”

Dealer Expansion

VW, the Wolfsburg, Germany-based carmaker that owns a dozen automotive brands, is planning to increase its number of dealerships in China to more than 3,600 by 2018, up 50 percent from now, the company said. VW said it will also introduce a range of low-to zero-emission models to meet rising demand for such cars in the country, starting with the e-Up! and e-Golf this year, followed by models such as the Audi A3 E-Tron plug-in hybrid.

“We will intensify our customer orientation even further so that we can respond even faster and more flexibly to customers’ wishes -- particularly here in China,” Winterkorn said.

Close Race

Outselling GM in China helped VW surpass the U.S. automaker as the world’s second-biggest carmaker by sales last year. VW, whose businesses include the Audi and Porsche premium marques and the Skoda mass-market nameplate, has said that it may sell more than 10 million vehicles for the first time in 2014, four years earlier than planned.

The German company will introduce more than 100 new or revamped models through next year in a strategy to overtake Toyota Motor Corp. as the global industry leader by 2018.

Still, VW lagged behind GM in China during the first quarter, according to figures released by the companies this month. GM, which had been the top-selling foreign automaker in the country for eight straight years before losing that spot in 2013, saw first-quarter China deliveries rise 13 percent to 919,114, edging out VW’s 880,700 units.

GM is unveiling a redesigned Chevrolet Cruze sedan at the Beijing auto show, picking China for the model’s global rollout. The Cruze, Chevrolet’s best-selling model in China last year, is one of the six new or refreshed models under the brand being brought to the nation this year by GM. The Detroit-based company is also showing three dozen other vehicles at the show.

Redouble Efforts

GM will introduce more than 60 new and refreshed models by end-2018 in China, according to Tsien. The largest U.S. automaker is spending $12 billion in China from this year through 2017 to boost products and manufacturing capacity.

Elsewhere, Ford Motor Co. is bringing its premium Lincoln cars to China decades behind Audi and BMW, testing whether the second-biggest U.S. automaker can emulate the recent turnaround of its namesake brand.

Even though the company started producing cars in China in 2003, about two decades behind VW, the popularity of its SUVs and Focus cars helped Ford see a 49 percent surge in China sales last year, overtaking Toyota to become the nation’s fifth-largest foreign automaker. This year, it’s on pace to overtake Hyundai Motor Co. and Nissan Motor Co. for third place.

Ford Prototype

Ford unveiled a prototype of a seven-seater off-road SUV that will preview a model sold for the first time with Jiangling Motors Corp.

To catch up in China, Toyota will introduce 15 new models by the end of 2017 as part of its goal to become the No. 1 Japanese automaker in the country, said Executive Vice President Yasumori Ihara. The Toyota City, Japan-based automaker, which first entered China with the Crown 50 years ago, forecasts sales in the country will expand to 1.1 million vehicles this year. At the show, the world’s largest carmaker is displaying 38 vehicles and concepts.

Jun Seki, head of Nissan China, said in an interview the company will keep its position as the nation’s third-largest foreign automaker.

Bayerische Motoren Werke AG, which trails VW’s Audi in China deliveries, displayed a new luxury concept car in a world premiere in Beijing. The model drew the attention of VW CEO Winterkorn, who was at the BMW stand pouring over the car.

Among local brands, China FAW Group Corp. unveiled the most expensive Chinese car ever, the Red Flag L5, at a starting price of 5 million yuan ($803,300). That’s enough to buy a Ferrari FF in the country, according to auto pricing website Cheshi.com.

— With assistance by Dorothee Tschampa, Alexandra Ho, Jie Ma, Yuki Hagiwara, Craig Trudell, Tian Ying, and Christoph Rauwald

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