SHANGHAI -- Volkswagen AG said on Friday it aims to sell 600,000 cars in China this year, a 17 percent leap from 2002, underscoring the rapid growth of the world's fastest growing major car market.
Volkswagen, which controls about 40 percent of the China market, also said it aimed to make 30,000 to 40,000 of its low-priced Gol car this year, which analysts said was meant to safeguard market share as competition heated up.
"That is just a target for us," said Ma Jinhua, a spokeswoman for Volkswagen, quoting a speech delivered on Friday by the automaker's Asia Pacific chief, Bernd Leissner, in Shanghai.
China's dominant car maker sold 513,000 cars in the country in 2002, a jump of nearly 43 percent. It expects car sales on the mainland, its second biggest market after Germany, to hit the one million mark by 2007.
Foreign automakers such as Ford Motor Co. and General Motors are either setting up shop or expanding capacity in China, where car demand is revving up alongside rising incomes.
Volkswagen is now busy enlarging its capacity at its Changchun and Shanghai joint venture plants, fending rivals off and chasing galloping car demand growth this year of an estimated 15-30 percent, a by-product of rising incomes in China.
"Of course we must maintain our market share," said Zhang Suixin, Volkswagen's managing director in China.
Volkswagen's sales target appeared conservative when compared to the top end of analyst predictions. Some said it would get progressively harder for the German automaker to ramp up sales from an already high base.
PROTECTING THAT LEAD
But Volkswagen, which has invested about three billion euros in China so far and is by far the largest foreign automaker in the country, should defend its lead easily, analysts said.
"There's be no doubt Volkswagen will remain China's biggest sedan maker this year and in the next two years, with a market share of more than 30 percent," said Xu Xiang, a senior auto analyst at China Southern Securities.
"A 17 percent rise in sales this year is realistic, taking into consideration its already much larger base of production."
It's the Gol -- starting off with a compact 1.6 litre two-door version, with a four-door version to be introduced later this year -- which might prove Volkswagen's ultimate weapon against its rivals.
The Gol is one of the cheapest foreign-made cars in China, a haven for global automakers at a time of depressed world sales.
The Gol would sell for between 75,000 yuan ($9,100) and 98,300 yuan, officials quoted Leissner as telling auto executives as the first hatchback rolled off an assembly line in Shanghai.
"But the Gol will be very competitive in the low-end market, so it's hard to say whether market share will drop just yet," said Yale Zhang, an analyst with Automotive Resources Asia.
Its plant in Changchun, a venture with First Automotive Works, is planning to raise output capacity to 300,000 by the end of 2003, from 200,000 at present.
Volkswagen's venture with top domestic automaker Shanghai Automotive Industry Corp also plans to turn out 330,000 cars this year, but they have announced no new target for expansion.