Bold words. VW says that by 2010 it can produce 10 million vehicles and pass Toyota (NYSE: TM) and GM (NYSE: GM) as the world’s largest car company. According to the Times "To those who suggest that closing a 3m vehicle gap (Toyota produced 9.4m last year) is a very tall order, company management explains that, in 2006, the number of conventional passenger cars made by Volkswagen and Toyota was fairly similar – 5.2m for Volkswagen and 5.5m for Toyota – and that the difference is made up by 4x4s, “people carriers” and light trucks."
Volkswagen only recently introduced a full range of these multi-purpose vehicles. They will play an important part in its future growth
VW may find that things don’t go as planned. As a new entrant to the pick-up and SUV markets, the company will find global competition for not just Toyota and GM, but also Ford (NYSE: F), Nissan, and Honda (NYSE: HMC). Most large countries also have local car manufacturers who may not be anxious to give up a large piece of their business.
While VW may have a chance to get a reasonable piece of the auto sales in huge countries like China, it has almost no market share in the world’s largest car-buying nation, the US. Taking away business from a desperate company like Ford and a successful company like Toyota may be nearly impossible.
Douglas A. McIntyre