The auto industry may have a new sales leader, Volkswagen outselling Toyota during the first half of the year for the first time.
But how things will shake out the rest of the year is far from certain, especially as the world’s largest automotive market, China, shows signs of faltering after more than a decade of double-digit growth. VW is the largest player in the Chinese market and has been struggling to head off a slump there.
Toyota has its own problems. While it is gaining ground in China it has lost momentum in its home Japanese market. Overall, the maker saw sales dip 1.5% during the first six months of 2015 to 5.02 million vehicles.
General Motors, which dominated the global sales charts for seven decades, is set to report its first-half figures on Thursday. It lost the sales crown to Toyota in 2008, regaining the lead briefly in 2011 when Toyota and the rest of the Japanese auto industry were slammed by a major earthquake and tsunami that shut down much of their operations for the months following.
GM slipped to third place last year, with global sales of 9.92 million, and in recent months it has been in a race with the Renault-Nissan Alliance that could see it slip to fourth this year.
Toyota officials, including President Akio Toyoda, have long insisted they do not put much stock in being number one. That said, the company had been pushing production at a pace that could maintain the company’s sales leadership. In 2014, Toyota sold 10.23 million vehicles. But this year, the Japanese giant says that could slip by 1%, to 10.15 million.
One reason is Japan, the world’s fourth-largest automotive market. Sales have been in the doldrums for years due to an ongoing recession, but the situation grew worse with the addition of new sales taxes last year.
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Volkswagen CEO Martin Winterkorn has been far more open in his bid for global leadership, setting a target of toppling Toyota as king-of-the-hill by 2018. At the current pace, it could get there three years ahead of time. Volkswagen sold 10.14 million vehicles last year, and volume stood at 5.04 million for the first half of 2015.
VW has had a variety of factors helping it build momentum. It has scored several hits with new products, such as the seventh-generation Golf that recently was launched into the U.S. market, a year behind Europe and other parts of the world. The maker operates more than a dozen brands, including its most recent car-side acquisition, Porsche.
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But the German maker faces some of its own challenges, most notably in China, where sales may not even meet the modest 7% growth target industry leaders had set earlier in the year. In fact, Ford Motor Co. is warning that the country’s once-booming car market is likely to see auto sales of between 23 million and 24 million for all of 2015, down from an earlier forecast of 24.5 million to 26.5 million. As the largest maker in China, VW stands to be hit hard by any slowdown there.
It also faces challenges in the American market where sales have lagged well behind the general industry recovery in recent years. Part of the problem is a lack of new product in a market shifting more and more from passenger cars to crossovers and SUVs. But VW also has been hurt by quality problems that have made many traditional loyalists wary.
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With so many factors at play, it is far from certain what will shake out during the second half of 2015.