Volkswagen and Toyota, are two major automotive groups in the world. Volkswagen is known as one of the most aggressive of all groups holding primary positions in the premium brand car segment. Toyota Group replaced General Motors by thrusting it down from first position to the second position in 2007.
Volkswagen AG narrowed the gap in nine-month sales with market leader Toyota Motor Corp. They enter the world’s two largest automakers enter the fourth quarter in a neck-and-neck globally competitive race to top the chart in the multi-brand section in the industry’s global scenario. Even analyst have hope attached with General Motors who succeeded becoming the market leader in the car segment in the year 2011 after being as major crosswords in 2007.
Sales target decide the number game. Worldwide deliveries for Toyota, including its Hino Motors Ltd. and Daihatsu Motor Co. units, climbed to 7.6 million vehicles through September. Volkswagen reported a 5.3 percent gain in sales to 7.4 million vehicles. This excludes the outcomes of both its heavy-truck units. Detroit-based GM is third with 7.37 million sales. However there are rising shouts about rising scrutiny over the safety of vehicles. The defective cars are a risk to all world players without exclusion.
Strongly, Volkswagen staked its claim to the crown of the world’s number one auto company. These three groups with their different work culture and belonging to different continents are in the same tracks running parallel to top the market. All three groups are leaders in their own domestic markets.
Volkswagen’s deliveries by the end of September, including the Porsche and Audi luxury divisions and MAN and Scania heavy-truck units, trailed Toyota’s by 722,000 vehicles in 2013 compared with 3,230,000 in 2007 (Before taking majority stake in MAN), according to " ACG Global Automotive Strategy report'. The outcome of Scania and MAN merger is not per expectation. There is tremendous pressure to match their expectations. Currently Volkswagen does not have a expansion plan due to cost pressure.
Revenues for Volkswagen continue to grow more rapidly (up 63.5%) with demands in the niche market of pricey luxury models from Audi, Porsche and other premium brands have been strong. However, one cannot count on Volkswagen’s grandiosity which can prove to be delusional; especially until their plans for the U.S., where Volkswagen would need to triple its 2008 volume to meet his target of one million cars a year are not rolled out.
Without the strategic move in capturing local market by financial means to climb the market ladder it is quite difficult to spread the foothold better in the market. Volkswagen alone cannot make it to the US Market. US is the one of the biggest market for Commercial vehicle & cars and it is challenge for Volkswagen to have its strong presence in USA. To fill this gap, Volkswagen purchase majority stake in MAN and Scania. In Heavy truck segment Volkswagen group together with MAN & Scania is the third largest manufacture globally. It is possible that with this step in regional market to handshake with the prime leads in the local market, Volkswagen group stands a great chance to make its strong presence felt in USA/NAFTA market.
To become one amongst the biggest automotive group in the global market one has to spread branding roots in all the segments capturing both the class of preferred users be it mass or a class. Only being number one by topping the sales as a brand in the premium cars or only topping the sales of heavy vehicles will not make the player eligible to the real label of a ‘Multi Brand’. If the Company is playing well in one or two continents and doing poorly at the other small regions, it calls for accelerating growth overall segments both in in terms of sales as well as profit. Any automotive industry player can find room for high scale improvement and scale up with best market research in understanding nuances in the success made by their competitors in the market.
It could be possible to be a biggest automotive group. Volkwagen views Navistar or Paccar as gateways to enter the ready market by shares in NAFTA region. Both are strong players for these region. It could be on winning move to cross over European as well as the Chinese market since Paccar’s European brand ‘DAF’ has a great brand value. DAF Trucks are a leading European truck increasing its EU market share in the 16+ tonne segment is 16%. As a brownie to the major buy, it holds a strong position in the tractor segment. The rule of the game does not end here.
To win, it calls for an in-depth analysis of market for OEMs to be flexible and be adaptive to the local market sentiments. Finding these gap and immediately taking steps to care for the market interests and catering to the local and regional preferences beget more buyers following the one adaptive of the ongoing change management. Financially, all the three companies are facing similar kind of issues. They all are dealing with financial issues due to uncertainty of world economy, Russia and Ukrain crisis, Global slow-down, currency exchange rate, Product life cycle, new market entrance and after sales challenges.
Mobility Concept of Vehicles.
Region wise analysis to understand market scenario:
China, USA, Japan, Germany, Brazil, India, UK, France and Italy are the biggest car market in the world. To become market leader, OEMs has to consider the local market dynamics and make the product portfolio which fit in local demand frame. For every country, there is different market dynamics and OEMs can use same platforms to play with but with necessary changes by using same corporate and product demand.
Sales Trend Analysis:
In local dynamics it could be Emission norms, type of fuel, pricing, customer perception, intercultural dynamics, Infra structure, Safety norms, buying behavior, brand strategy, after sales and parts price, resale value, competitor strategy. For example When Volvo has launched its three side air bag, it was successful in Sweden because most of the Swedish females are working and they use cars as a primary transportation also they concern about their child safety. Car was expensive but they were ready to pay for extra safety for themselves and children.
At times it is a common occurrence that when a product is launched in Germany, it is unsuccessful due to customer preference that tilts more on the positive side to buy Volkswagen brand. And these are found to be the female, single. Opel car is struggling in Germany due to Car frame, during winter time there is spread of Salt to melt snow on the road. The bottom of Opel car was rusted due to salt. These are geographical factors and climatic conditions affecting the customer preference as such.
Asian Market is quite attractive and majority of OEM are coming into this market. Though China and India are two biggest players but loosing hold in Asian market, they can be well expected to revive and raise up by 2015.
Volkswagen is the market leader in China. It is having two joint ventures with Chinese OEM. Volkswagen has also improved its sales in India. In Japan and India, Toyota is stronger than Volkswagen.
Toyota is the strong player in Middle East has registered record sales in 2013. Yemen and Iraq was the major market. Middle East sales market is driven by Multi Brand distributor. Passat is the most popular brand in Middle. Toyota is strong player in Middle East.
Germany is the biggest market in Europe, it is also major market for premium segment. UK and Italy are also major major markets for premium segment.
Russia is the biggest market in CIS region. It was considered as a major country for premium car segment. Recently there are some political issue and market is badly affected. All major OEM are struggling and making losses due to restriction imposed by European countries and USA.
USA is the one of the most important market for Automotive. Toyota and General Motors are the important players in this region. Recently GM has taken some steps to improve its global performance in car sales. Volkswagen needs to focus on this region.
North Africa could have some positive market trend. South Africa is still need some time to register positive growth.
Brazil is the largest market of this region. Market sentiments are negative for Brazil.
In all the above graphs, if one looks closely at, there are some strategic growth points which can be found to capture the market by sales and profit. Volkswagen and Toyota both stand equal chance outwitting the other two in the race to become Globally No.1 in Multi Brand in the automotive world of Cars, Buses and Trucks. All the said and done, the unchangeable market factors or certain inevitable governmental regulations and controls cannot be over looked. Still there are possibilities of performing the need analysis, market analysis, and preferential choices by questioning major interest groups associated as loyal purchasing kings of the industry to top the listing of Best seller, World No.1 Multi-Brand most wanted ones.
Volkswagen is dominating premium segment. Toyota needs to fill this gap by introducing luxury brand in its portfolio.
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Toyota with their quality and customer centric approach.
Padmakumar Kumar
Regional Head Customer Care
Piaggio
fingers crossed…But hoping Toyota will manage to retain its title
It’s simple math. VW will be the next top dog because they are growing, increasing production and chasing the top spot. Toyota, on the other hand, has had so many quality issues that they said they will cut back on new model intros and cut back production a bit to focus on quality. Toyota is willingly giving up the global sales crown.
Norris H
Automotive Training and Consulting
Sales/Management/Product/Accessories & Fixed Ops For Dealerships
Can somebody please explain to me the value of being the one selling the most cars?
Is there anybody out there paying more for a Passat or Golf if VW is No. 1 in sales?
From my point of view, a company should strive for being the best not the biggest….
isn´t that exactly one of the root cause for Toyota´s today´s troubles….?
I also think VW will make it, but at what cost….I have no clue…..at least the cost for renting parking space to store all the cars pushed into the market will be huge…)))))
Maybe a look on the P&L of the VW brand alone gives some indication…..
And finally, please believe me one thing…just because Toyota did a lot of recalls and is more open about quality problems, do not believe that other OEMs have less….they just deal with it in a different way….
Dirk Fischer
Interim General Manager
SHW Automotive GmbH
Dirk, Toyota said they are going to reduce their growth intentionally in order to focus on quality for a while. That means fewer new products in the pipeline and possibly slower production lines as well. That all translates into VW taking over the sales crown. Btw, increased service and parts business for dealers goes along with that too. A big benefit to being number one, along with higher resale value due to increased demand, is better lease rates.
Norris H
Automotive Training and Consulting
Sales/Management/Product/Accessories & Fixed Ops For Dealerships
VW, they are funding their 2015 budget a great bit, how ever what sells, they are not following what younger generation loves, Boxy cars, reasonable trucks under 18K, they have great engine and transmission that they could work with. if they would learn from ELON, little bit, they would saturate the market
Ali Rabani
Experienced Senior Automotive Manager
thats a good question. being involved in the auto parts industry as a consumer I see a big difference between both as far as the mechanical aspect foreign cars are becoming more popular but each brand has its own advantage and disadvantages.I dont see a lot of vw come in for repairs but when they do their parts are more exspesive and harder to find. but toyotas I see more often but their issuse are not as often but at least parts are more readily available and usually a fraction of the cost of vw parts.I think you will see toyota on top in the future.
Robert Rose
Parts sales manager
Auto zone Mentor Ohio, USA
Unlike VW, Toyota is not relying on predatory lending practices to boost retail sales. In the United States Volkswagens quality has been subpar from what I’ve seen first hand and they’ve been pretty good at keeping it quiet. Toyotas “problems” despite the medias best efforts to throw Toyota under the bus have been relatively minor especially when you compare to GM. Toyota may not get the #1 spot but they will remain top shelf for years to come. VW will not.
Mike MacDonald
Sr. sales
Karl Malone Toyot
Draper, Utah – USA
As a company who specializes in European Automobiles, we are going to go with Volkswagen for the win.
European Automotive
Looks like VW Group made it, thanks to strong performance by Audi.
Michael Perschke
Director Global Dealer Network Strategy & Concepts
Munich, Germany
Audi AG
Yes.. VW group made it.
Toyota is a long term player. Master of springing back from the edge Toyota will take over the No. 1 title even if it is taken by others for one or two year.
Mainak Sengupta
Manager – Service
Toyota Kirloskar Motor
It’s good new’s in favour for volkswagen.But as far as the Global Top status is concern whoever is the best service provider after sales in terms of 3S SYSTEMS that to with a competitive spirit he is the only winner and holder of Global top status AND SINCE BEGINING TOYOTA IS UP TO THE MARK.
NIZAMUDDIN MOHD.BASHIR
BR.MANAGER at RAVINDRA AUTO DIST,P.LTD
Don’t forget ford is now in the game not just imports
Darcey Coyne
Auto sales at Barrie Ford
Innisfil, Ontario, Canada