Volkswagen is once again the world’s biggest car-maker after Toyota announced a slowdown in its annual sales growth, handing the title to the troubled German giant.
The Japanese car company said 2016 sales, including its Daihatsu and Hino subsidiaries, rose by 0.2pc to 10.2m, meaning that it was beaten over the line by VW, which had sales of 10.3m vehicles including its Audi, SEAT, Skoda and Porsche marques, a rise of 3.8pc on the previous year.
The two companies have been in a race for the title for years, and VW’s victory comes despite the company being in turmoil over the “dieselgate” scandal, with the German car-maker admitting that 11m of its vehicles were fitted with “defeat devices” to beat emissions tests.
Volkswagen Vs Toyota
VW has taken provisions of €17bn so far to account for the cost of the scandal, and agreed to pay more than $10bn in compensation to almost 600,000 US motorists who cars were affected. Legal claims in other countries are gearing up.
Taking the global sales crown marks the bittersweet culmination of an aggressive expansion that former chief executive Martin Winterkorn kick-started 10 years ago. While surging demand in China and the popularity of the upscale Audi and Porsche brands’ line-ups boosted worldwide deliveries, the VW marque lost market share in Europe, its second-biggest region, following revelations in 2015 that the company manipulated diesel engines to pass emissions tests.
VW group deliveries last year rose 12.2pc in China, where the scandal is a non-issue because the automaker sells almost no diesel vehicles there. Sales in Europe gained 4pc, less than the overall sector, while the crisis fallout hurt demand in the US and recessions cut sales in Russia and South America.
Toyota’s sales last year lagged behind Volkswagen mainly due to its performance in the US and China, with demand for its flagship Camry sedan waning in the US and sales in China expanding at a slower pace than the overall market. Toyota must also contend with possible trade tensions as US President Donald Trump pressures foreign car makers to make more cars and trucks in the US.
Toyota will invest $10bn in the US over the next five years, maintaining its pace of spending during the last half decade, joining other manufacturers with highlighting projects in response to pressure from President Trump to create jobs in America. Toyota was heavily criticized by Trump over plans to build a Corolla plant in Mexico.
Trump is a bigger risk for Toyota than for Volkswagen because the German car maker has a small exposure to the US market according to an analyst. The VW brand has embarked on a restructuring push outside China and will boost its line-up of sport utility vehicles, the industry’s fastest-growing segment, where it lags behind Toyota and General Motors.
“Our new strategy through 2025 doesn’t include any sales targets any more,” Dietmar Voggenreiter, sales chief at VW’s premium-car unit Audi said in an interview this month. “These times are over.”
