VW expects to sell one million vehicles in China in 2008

GERMAN auto giant Volkswagen AG reported its first-quarter sales in China rose 32.5 percent from a year earlier, with expectations it could now realize a full year target of one million vehicles in the world's second largest auto market.

Volkswagen Group China, with its two joint ventures Shanghai Volkswagen and FAW-Volkswagen, together delivered 268,200 vehicles to customers in China in the three-month period, the company said yesterday.

Monthly sales reached a new record of 103,200 units in March.

Sales of the Volkswagen brand expanded 24.4 percent to 221,130 units, including 2,373 imported vehicles, while that of the luxury car brand Audi climbed 25 percent to 30,188 units.

Skoda, the Czech brand affiliated to Volkswagen, saw its sales rise more than five times to 16,212 units after it added a 1.6-liter version in the second half of last year in addition to a 1.8 Turbo to 2.0-liter model.

Volkswagen also sold 17 Lamborghini super luxury sports cars and 125 Bently luxury sedans during the same period.

''We have been working with our Chinese counterparts to expand new markets and continue our upbeat growth momentum in the first quarter,'' said Dr Winfried Vahland, president and chief executive officer of Volkswagen China.

''I am convinced the sales will further go up to one million this year, keeping us as the market leader,'' he added.

Volkswagen is the second-largest overseas auto maker in China behind GM. It has been taking advantage of its sponsorship of the 2008 Beijing Olympics to lift its brand and boost sales.

It improved sales by 28 percent to 910,491 vehicles last year in China, increasing market share to 18 percent from 17 percent in 2006.

The car maker, which dominated market share in 1990s due to early entry into China, has been on track to turn around sales over the past three years after losing ground to rival auto makers.

Their restructuring program included an almost 40 percent cost reduction by increasing local sourcing as well as introducing 10 to 12 new models on the mainland before 2009.

Shanghai Volkswagen, a local venture with China's biggest auto giant Shanghai Automotive Industry Corp, will introduce their brand new mid-class sedan Livada in the latter part of this year.