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Marton Pettendy9 Apr 2014
NEWS

Volkswagen eyes top five

German brand targeting a bigger slice of Australia's automotive pie post local car-making

Volkswagen has suggested it can be a top-five player in Australia’s new-vehicle market once manufacturing ceases here by then end of 2017.

Germany’s ‘people’s car’ brand has long been among the top 10 brands in Australia and hoisted itself ahead of Subaru and Honda to become the nation’s eighth-largest marque by volume in 2011.

That year it sold 44,470 vehicles, achieving a 4.9 per cent market share, and has increased its sales every year since then, selling almost 55,000 vehicles in 2013.

So far this year Volkswagen continues to account for almost five per cent of the market, but is closer than ever to Mitsubishi and Nissan, which lies just outside the top five behind Toyota, Mazda, Holden, Hyundai and Ford.

Volkswagen Group Australia boss John White believes that pecking order will change when Ford, Holden and Toyota stop building cars here within four years.

“We’d like to be in the top echelon of brands,” said White, when asked by motoring.com.au what natural position he believed Volkswagen would adopt within the Australian automotive industry when all brands became full-line importers.

“We know that Toyota and Holden have a huge head-start over us, but I think we can do at least a couple of rungs better.”

Asked if that meant a top-five position, he said: Top five would be nice. We’re number eight now, so a couple more steps would bring us into that region.”

The VGA managing director’s comments follow an even bolder sales target revealed last week by GM Holden’s new managing director, Gerry Dorizas, who said Holden would return to market leadership by 2020 <<<<< news/holden/holden-to-regain-number-one-spot-dorizas-42719>>>>>.

Holden believes Toyota’s market share -- which fell from a high of almost 24 per cent in 2008 to a low of 18 per cent in 2011, but increased to 19 per cent last year -- will erode considerably after it ceases manufacturing in 2017 (the same year as Holden).

But to dethrone Toyota (18% so far this year) from the number one spot, Holden (10.3%) would first have to fend off Mazda (10.4%), which has eclipsed its share so far this year for second overall, as well as Hyundai (8.8%), whose share has grown almost as much as Mazda’s.

While Ford remains static in fifth with a 7.6 per cent share, Nissan share has reduced by more than three percentage points to 5.5 per cent in the first quarter of 2014, while Mitsubishi lies close behind on 5.4 per cent -- just ahead of Volkswagen.

White said he believed the new-car market was currently “inflated” and that Volkswagen expects only “moderate” sales growth between now and 2018, by which time the German car-maker plans to replace Toyota as the world’s number one.

He said the 2014 market, which is currently 2.4 per cent down on the first quarter of 2013, would remain flat following the end of the mining boom, and forecasts medium-term growth less than 1.25 per cent.

“We don’t see it growing that much and I’d say 2014 will be a flat market.”

White, who was the president and CEO of Volkswagen Group Canada before he became VGA MD in April 2013, said Australia -- with more than 50 brands competing for about a million sales -- was the most competitive in the world.

“The number of brands here is amazing,” he said. “It’s a hyper-competitive market. Before I started to study the market I didn’t know that. I though the US was the most competitive market.”

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