Volkswagen, world's largest carmaker?

With the Porsche business settled, Volkswagen goes for the grand prize: To unseat Toyota and to become the world's largest carmaker. They are closer than many may think.

Last Friday, the final papers were signed: Porsche becomes Volkswagen's 10th brand, the Sheik of Qatar becomes a big shareholder of the combined Volkswagen/Porsche imperium. Control of the company sits with the Porsche/Piech families which will own 35 to 40 percent of the company.

With months of wranglings behind them, Volkswagen can look ahead. Their target: Troubled Toyota.

The new Volkswagen/Porsche conglomerate has the right stuff to become the world's largest automaker, said Volkswagen CEO Martin Winterkorn after announcing the successful consummation of the three-way marriage. Lower Saxony's premier Christian Wulff, who sits on the VW supervisory board and had a deft hand in Piech's victory over upstart Wiedeking, sets the same goal. "It is our clear target to become the number one in the worldwide auto business," Wulff declared to Germany's Handelsblatt.

A case of hyperbola? At first glance, it sure looks that way: According to OICA, the world's official scorekeeper of auto production, Toyota had made 9.2 million units in 2008, VW had made only 6.4 million.

This was 2008, this is now. In June 2009, Toyota's year-to-date worldwide production was down by 40.6 percent, whereas Volkswagen's deliveries were down by only 5 percent. Volkswagen had little to lose in the USA, but is strong in the surging Chinese, German, and Brazilian car markets.

"Surpassing Toyota in terms of net profit and global production in 2009 suddenly looks like a strong possibility," wrote Automotine News after looking at the astonishing numbers.

Volkswagen would be 9 years ahead of plan. In 2008, Volkswagen announced its "Strategy 2018." Within 10 years, they wanted to topple Toyota from its number one position.

With current trends continuing, Volkswagen may very well rule the world by the end of this year. As of June 2009, Volkswagen had already surpassed Toyota: Volkswagen's year-to-date deliveries in June were 3.1m, whereas ToMoCo's worldwide production stood at a little less than 3m.

To stay ahead of Toyota when the US market rebounds, Volkswagen must take market share wherever it can find it. Opel becomes a target of opportunity.

Volkswagen, which competes head-to-head with Opel in most segments, would rather see Opel dead than alive. The German government favors parts maker Magna to take over Opel. Volkswagen has a problem with Magna and Opel. VW CEO Winterkorn threatened again last week that VW will pull its parts business from Magna if they go ahead with their plan to acquire Opel. "We are looking with suspicion at what's happening here," Winterkorn said according to the German edition of the Financial Times.

An infuriated Opel labor leader Klaus Franz hissed back: "the threat not to award Magna with contracts is tantamount to blackmail. Whoever says a rescue of Opel through Magna poses a competitive disadvantage, is hoping for the downfall of Opel in order to gain an edge for himself and reduce his own overcapacities at the cost of Opel." He may be close to the truth.

Volkswagen, which competes head-to-head with Opel in most segments, wants Opel out of the way. Berlin seems not to be inclined to give government money to anybody else than Magna. GM is dragging its heels. Volkswagens threat gives Magna reason to pause. Opel is like a shipwrecked sailor: The longer the rescue takes, the slimmer Opel's chances of survival. After Germany's national elections on September 27, "nobody will give a hoot for Opel," said the German professor Ferdinand Dudenhoeffer. With a close competitor out of the way, VW would be a step further to its declared goal of world domination.

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About the author: Bertel Schmitt, Gasgoo's columnist, is CEO of Hong Kong based parts sourcing company Sinamotive. Before founding Sinamotive, with the assistance of U.S. venture capital, Mr. Schmitt was a marketing consultant to Volkswagen AG.