VW and Toyota face off for Chinese market

Shanghai, January 25 (Gasgoo.com) Volkswagen AG is eyeing to boost its global sales to 8 million vehicles in 2011 and close the gap with Toyota Motor Corp. On the other hand, the Germany automaker is accelerating expansion to keep a head start over Toyota in Chinese market.

Volkswagen is set to inject 2.4 billion euros to develop new products and increase the production output in China by the end of 2010, which is part of its 20-billion-eruo global investment plan, according to Dr. Winfried Vahland, president and CEO of Volkswagen Group China. He added that 70 percent of the investment is intended to develop new products, another 500 million euros will be used to develop power train system and the reminder will be funneled to boost output capacity.
 
"We (Audi division) aim to sell 200,000 vehicles by 2015 in China, and new car models will be introduced as long as they fit in with the local market," said Rupert Stadler, Chairman of the Board of Management of Audi AG. The all new Audi A4 is set to be locally assembled early next year, and the third generation of Q5 will make its world premiere at the upcoming Beijing auto show in April.

Volkswagen group is speeding up to broaden its product mix and tap the growing demand in China. While Toyota, currently still lagging behind Volkswagen, is catching up at a more rapid pace.

Toyota sets its sales target in China this year at 700,000 units, up from 499,000 units last year, while VW, currently still the largest automaker in Chinese market, aims to sell one million units this year from 910,491 vehicles in 2007. Also Toyota plans to increase its market share in China to 10 percent in 2010 from the current 3 percent. Volkswagen's market share stands at 18 percent last year.

In the first two months this year, Toyota sold a total of 82,539 vehicles in China, up 44.9 percent from the previous year, while Volkswagen sold 180,490 units, up 45.7 percent, according to China Association of Automobile Manufacturers (CAAC).

Toyota Camry continued to be the best seller of the mid-range sedan segment for the past 15 months. Also Toyota's adding new products to its portfolio. Its popular compact sedan Yaris will be released at Beijing Auto Show next month and launched in the Chinese market simultaneously.

Meanwhile, Toyota is planning to invest RMB 3.6 billion ($502.79 million) to expand capacity in its Changchun plant, according to Shanghai Securities News.