Volkswagen AG (OTCMKT:VLKAY) Is Now The World’s Biggest Automaker

Volkswagen AG (OTCMKT:VLKAY) Is Now The World’s Biggest Automaker

$GM, $DDAIF

Volkswagen AG (OTCMKT:VLKAY) surpassed Toyota Motor Corp (NYSE:TM) to become the biggest automaker by deliveries in 1-H, putting the company on track to capture the worldwide sales Crown 3 years ahead of its target.

Tuesday, Toyota said it sold 5.02-M vehicles in the 6 months through 30 June, trailing the 5.04-M that Volkswagen reported earlier this month. Deliveries declined 1.5% for Toyota and 0.5% for Volkswagen.

The German carmaker boosted sales in its domestic market and in broader Western Europe by more than 6%

Volkswagen benefited as car demand in Europe accelerated at the fastest pace in 5.5 years, softening the slowdown in China, its biggest market. To achieve its goal set in Y 2007 to become the world’s largest automaker, Volkswagen will have to withstand the decline in demand brought about by China’s slumping stock market and competition from cheap SUV models by Chinese brands.

A global auto industry that has expanded every year since Y 2009 faces a stalling market in China, collapsing demand in Russia and weakness in some Southeast Asian and South American countries.

In the US, industry wide deliveries increased just 4.4% during 1-H of this year, putting the market on track for its smallest annual gainer since the recovery began.

General Motors Co. (NYSE:GM), the 3rd-biggest automaker by global sales, said earlier this month that its worldwide deliveries fell 1.2% in 1-H to 4.86-M vehicles.

Christian Klingler, Volkswagen’s sales boss said earlier this month the company was “not immune” from market trends in China and that conditions in South America and Russia market “remain tense.”

In Europe, the longest stretch of economic growth for the 19 countries using the Euro currency  has put auto sales on more solid footing in countries where Volkswagen dominates.

The German carmaker boosted sales in its domestic market and in broader Western Europe by more than 6 percent, helped by the VW Passat sedan and Porsche’s Macan compact SUV.

Toyota’s registrations in Europe rose 5.7% during the period, according to the European Automobile Manufacturers’ Association.

In the US, Toyota outpaced the broader market by posting a 5.6% gainer, driven by demand for its Lexus NX and Toyota RAV4 compact SUVs. By comparison, the VW, Audi and Porsche brands combined increased sales by 2.4%.

Both companies struggled in Japan during 1-H, where demand has been weak since last year’s sales-tax increase. Deliveries dove 8.2% for the Toyota and Lexus brands and 13%for Daihatsu.

Sales in Japan fell 17% for VW, putting the brand on track to fall behind Mercedes-Benz (OTCMKT:DDAIF) as the top-selling import for the 1st time in 16 years.

Stay tuned…

HeffX-LTN

Paul Ebeling

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