Volkswagen sees tougher competition after record 2012 sales
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FRANKFURT (Bloomberg) -- After posting record global sales in 2012, Volkswagen Group expects tougher competition and more uncertainties this year, CEO Martin Winterkorn said.
Deliveries in 2012 rose 11 percent to 9.07 million vehicles, VW said in a statement today. Last year "was the best sales year ever," Winterkorn said in the statement. "This is another big step forward in our Strategy 2018."
Included in the number are all VW Group brands, such as Audi, Porsche, Skoda and Seat, as well as the core VW marque.
With last year's gains, VW has increased annual group deliveries 44 percent since 2009.
By expanding in the United States and China, VW has largely shrugged off the effects of the debt crisis on European car demand, which has fallen more than 20 percent since its 2007 peak.
VW's ability to continue to grow will be challenged by slowing sales in Germany. Industrywide registrations in VW's home market tumbled 16 percent in December, leading to overall decline of 3 percent drop in 2012.
"Many markets are losing momentum," Winterkorn said on the sidelines of the Detroit auto show. "If the European markets are getting weaker, we need to expand abroad."
Volkswagen said earlier that the company will increase sales further in 2013 and will top the year earlier operating profit.
VW's growth last year was paced by the Audi luxury brand. Sales at the carmaker's biggest earnings contributor rose 12 percent to 1.46 million cars and SUVs. Sales at Porsche, which was fully integrated into the company in August, edged up 19 percent to 141,075 vehicles, also a record.
All regions posted more than 10 percent growth.
Volkswagen's deliveries in 2013 may stagnate, according to IHS Automotive. Volkswagen's total sales are forecast to edge 0.7 percent higher to 9.15 million vehicles in 2013, its slowest growth pace since the financial crunch in 2009, according to IHS Automotive.
To maintain growth, VW plans to double its lineup of SUVs for the VW brand. VW premiered the Taigun compact SUV concept at Sao Paulo Motor Show in October.
New SUV
At the Detroit show, VW is unveiling an SUV concept dubbed Crossblue that will be priced between the smaller Tiguan and upscale Touareg. The vehicle would seat as many as seven passengers and challenge Ford's Explorer, Toyota's Highlander and Chrysler Group's Jeep Grand Cherokee, which all start at about $29,000.
"The SUV segment is posting the strongest growth," said Frank Biller, an analyst with LBBW in Stuttgart, Germany. "This is where the action is."
The new SUV could help Volkswagen reach its target of increasing U.S. sales to 1 million Audi and VW vehicles by 2018 from 577,443 last year.
VW, which vies with General Motors for the lead in China, lags global rivals in the United States. Volkswagen could build the car at its $1 billion plant in Chattanooga, Tennessee, where it started production of a U.S. version of the mid-sized Passat sedan in 2011. The factory, which can produce about 220,000 vehicles annually as it's currently set up, was VW's first in the U.S. since it closed a facility in Pennsylvania in 1988.
Catching up in North America is crucial for Volkswagen's plan to overtake and Toyota to become the world's largest automaker by 2018.
Producing vehicles in North America instead of importing them from Europe has reduced Volkswagen's exposure to currency swings between the dollar and the euro, which have weighed on profits in the past. Volkswagen has the goal of making its money-losing U.S. operations profitable again in 2013.
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