General Motors used to be a shoo-in as the world’s largest automaker. But times have changed and companies have evolved. Now, the top spot is a three-company race heading into the finish, with Toyota poised to take the podium and jockeying between General Motors and Volkswagen heading into the homestretch.
For the first time, world auto sales are projected to hit 80 million on the back of a strengthened North American market and a boom in emerging markets like India and China. Projections show Toyota aiming for 7.4 million vehicles sold this year, General Motors to sell 6.95 million, and Volkswagen to reach 6.9 million. IHS Automotive, a forecasting and analysis company, says the three will be competing with one another for the title throughout the rest of the decade as it expects continued growth in the world car and truck market. Internally, Volkswagen is setting a goal to become the world’s largest automaker by 2018.
But the auto market isn’t all peaches and cream. All three automakers have seen their fair share of struggles throughout the past few years. GM ceded the top spot to Toyota in 2008, right before its 2009 bankruptcy. It gained it back last year when Toyota’s sales took a huge dive as its production couldn’t meet demand in the wake of the March earthquake and tsunami that devastated Japan. And all three automakers have seen problems in Europe, where the economy is still taking a beating as the eurozone crisis continues to be sorted out. Volkswagen is arguably outperforming its U.S.- and Japanese-based rivals, but Korean cars are soaring in Europe with double-digit growth, taking much-needed sales away, as they’re seen as better values in tough economic times. Sounds like what happened in the U.S. just a few years ago.
“Because the U.S. is so large, when we have a double-digit growth it’s going to propel the rest of the world,” said Rebecca Lindland, an industry analyst with IHS Automotive, in an interview with Bloomberg. “The gains can mask a myriad of sins elsewhere, because many of the other economies aren’t exactly setting the world on fire.”
Toyota is no longer struggling in most markets but has seen issues growing with anti-Japanese sentiments in China; Volkswagen and General Motors are doing much better there. GM hasn’t made money in Europe in more than a decade, despite the 2009 restructuring and an alliance with French automaker Peugeot that has so far proved fruitless. And Volkswagen’s sales are still minuscule compared to GM and Toyota’s in the U.S.
GM has stated publicly that profitability is more important than holding the world’s top spot, so it may permanently give up its position for Toyota and VW to duke it out. That’s not to say that the opportunities aren’t there to easily take it back should the other two automakers trip and stumble in the next few years.
Source: Bloomberg via Automotive News (Subscription required)