Since General Motors slipped from its position as the world’s bestselling automaker, a title it held for decades, the battle for automotive sales supremacy has raged between Toyota Motor Corp. vs. Volkswagen Group.
For 2021, the title goes to Toyota for the second year in a row, producing 10.5 million vehicles in 2021, a 10% increase from 2020, including vehicles built by Toyota subsidiaries Daihatsu Motor Co. and Hino Motors Ltd. By comparison, Volkswagen built 8.9 million vehicles.
A back-and-forth battle for number one
Toyota and Volkswagen have been sparring for the top spot since General Motors relinquished its decades-long lock to Toyota in 2012, selling 9.75 vehicles. It retained the spot in 2013 (10 million units), 2014 (10.2 million units) and 2015 (10.2 million units), before Volkswagen captured the global sales crown in 2016 with sales of 10.3 million vehicles. It retained the spot for 2017 (10.7 million units), 2018 (10.8 million units), and 2019 (11 million units) before surrendering it to Toyota in 2020, when the Japanese automaker delivered 9.5 million units).
A struggle to maintain production
Like all manufacturers, both Toyota and Volkswagen struggled to maintain production in the face of COVID-19 labor and parts shortages. The company actively reexamined its supplier base after its main supplier of wiring harnesses was affected COVID-19, ultimately unable to maintain production.
According to Bloomberg News, even mighty Toyota, and its vaunted — and widely imitated — Toyota Production System (TPS), succumbed to the virus as Toyota’s suppliers in Southeast Asia couldn’t continue production in the face of government restrictions and lockdowns, leading the automaker to slash its production plans by 40% late last year.
While Toyota, Volkswagen and other automakers have used TPS’s just-in-time to outsource production and reduce inventories to remain lean, the pandemic laid bare the system’s glaring weakness: a lack of redundancy. The system depends on a faultless flow of production without taking possible snafus into account. If COVID-related disruptions dissipate, TPS will remain intact. But if they continue, it wouldn’t be surprising to see OEMs reexamine their supply chains.
Decade-low sales for Volkswagen
At 8.9 million units, Volkswagen Group posted its lowest annual sales in a decade. Volkswagen-branded vehicle deliveries declined 8.1% to less than 4.9 million units. VW faced a severe falloff in China, where demand dropped 14.8 percent.
But the automaker did see its EV sales increase four-fold. Globally, battery electric vehicles accounted for 5.1% of sales, double 2020’s tally but a far cry from the automaker’s goal of 50% of sales, which it expects to hit in 2030.
Among brands, Audi deliveries declined nearly 1% last year, while S’s sales slid 12.8 percent. Other brands fared better. Porsche set a new annual record, delivering more than 300,000 vehicles, with sales rising 10.9%, while Seat saw volume rise 9.3%, while supercar brands Lamborghini, Bentley, and Bugatti collectively saw demand rise 23.6 percent.
What lies ahead in 2022
But Toyota remains bullish, expecting to produce 11 million units for its new fiscal year, which begins in April, according to a published report in the Nikkei newspaper. Whether COVID-19 and its variants allow that to happen remains to be seen.
This contrasts with sentiments at Volkswagen, with the automaker expecting chip shortages to continue into 2023. Given this expectation, VW expects 2022 production of as much as 9 million units, according to German business magazine, Manager Magazin. But that’s if things go as expected. The report suggests that production could drop to 8 million units should the situation deteriorate.