Volkswagen, currently the third largest automaker in the world, plans to eclipse Toyota for total production and sales by 2018.
 
This announcement could not have come at a worse time for Toyota, which is still reeling from an eight model recall and temporary production shutdown as a result of recent uncontrolled acceleration issues.
 
There’s nothing like kicking someone when they’re down.
 
This ambitious plan, recently approved by VW’s management board, includes boosting group sales by 60% and drastically improving profit margins in the coming years. The target sales goal is 10 million vehicles by 2018. To put this in perspective, VW produced 6.3 million cars last year, compared to Toyota’s 7.8 million.
 
This seemingly lofty goal is more realistic than you would think. VW is already the largest automaker in Europe. With the acquisition of Porsche back in November 2009, VW became the largest car manufacturing group in the world in terms of production.
 
Eight manufacturers now fall under the Volkswagen blanket; Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda, Porsche, and of course VW itself.
 
Toyota has manufacturing operations in over 26 countries and owns Scion and Lexus, which target budget and luxury consumers, respectively. Toyota itself falls somewhere in between.
 
Newly emerging auto markets in China and South America may be a key factor in Volkswagen’s success or failure as the #1 worldwide car manufacturer. Compact diesels such as the VW Golf may find its niche in these markets, where diesels are more widely accepted than in the U.S.
 
Success in the U.S. is a crucial step in dominating the world market simply because of its size. The key to winning over American consumers, at least currently, is to make a good hybrid car. Diesel cars, no matter how much they are improved, are not going to catch on in the U.S. because of the limited availability of diesel fuel and preconceived notions about diesel engines. Toyota is already well established in the hybrid segment with the Prius, which enjoys its title as “The Best-Loved and Most Efficient Hybrid in America” and will not be easily dethroned.
 
The E-Up, VW’s 170 mpg diesel-electric hybrid concept, is scheduled to hit dealerships in 2013. VW can expect stiff competition from Chevy and Nissan, who will have released electric offerings such as the Volt and the Leaf by this time.
 
Despite the current market slump, confidence is high. “It’s our goal to become the world’s largest carmaker and we will achieve this goal in the next seven to eight years,” said Christian Klingler, a Volkswagen Executive.
 
 
 
Source: USA Today, Volkswagen