Volkswagen brand sales in China surpassed sales in Germany for the first time in the first quarter of 2003.
VW-branded vehicles, made in China by two joint-venture companies, recorded sales of 149,500 units during the first quarter, compared with 114,000 units in Germany.
John Lawson, analyst for Smith Barney in London, estimates that China provided 22 percent of VW's net income in 2002.
VW owns 40 percent of the First Automotive Works joint venture and 50 percent of the Shanghai- VW joint venture.
Lawson says VW has maintained its 40 percent-plus market share in China in the first quarter.
"It's extremely profitable," says Lawson of VW's China operations. "We didn't expect it to be more profitable in 2003. That is because they've launched five products in China. And the price level in the market is coming down."