VW reveals race to overtake GM, Toyota
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VW reveals race to overtake GM, Toyota
WOLFSBURG, Germany (AFP) — Volkswagen is accelerating on record profits to overtake loss-stricken giant General Motors (GM) and Japanese Toyota within nine years, its management revealed boldly on Thursday.
The German giant, the biggest auto maker in Europe, is putting its foot down in the fast lane with the intention of becoming the biggest auto group in the world by 2018.
The gap is big, but the fuel tank of profits is powerful.
"I see Volkswagen in pole position ... after the crisis," chief executive Martin Winterkorn told a press conference here in the north of Germany.
"We are staying in the fast lane and the fuel tank is well topped up."
Volkswagen (VW) is the third-biggest auto manufacturer in the world, selling 6.3 million vehicles last year. GM and Totoya each sold rather more than eight million.
But GM is tottering close to bankruptcy despite huge US state aid, and Toyota expects to run up huge losses for its 2008-2009 year to the end of March.
VW, by contrast, made a record net profit of 4.7 billion euros (6.0 billion dollars) in 2008, a disastrous year for leading auto groups in general, and it expects to make a an operating profit this year, albeit less than last year, finance director Hans Dieter Potsch said.
Winterkorn warned, however, that business conditions this year would be "extremely difficult" and that sales would probably fall by about 10 percent.
The group might even report a loss for the first quarter. Potsch said that the latest data pointed in that direction since sales for January and February had fallen by 15 percent from the equivalent figure last year to 809,200 vehicles.
However, this was a smaller fall than that experienced by all sales by auto makers throughout the world which had contracted by 23 percent, VW said, lauding the performance of its small, and low-pollution cars, and the range of its models sold also under the brands of Skoda, Audi, Seat and Scania.
Even the involvement of the regional state of Lower-Saxony with an interest of 20 percent, which has been the subject of controversy for being outdated, is no longer criticised at a time when many governments are rushing to shore up stricken industries, including vehicle makers.
Winterkorn said that "many competitors envy us" because of our long-term shareholders in the form of the regional state and the auto maker Porsche, which holds more than 50 percent of the equity.
However, this did not discourage the group from seeking state guarantees of up to 2.0 billion euros (2.56 billion dollars) from the federal government in Berlin for its VW bank.
And it helps to explain why VW was cautious on Thursday towards the prickly case of Opel, the German and European arm of GM, which is a direct competitor of VW but is looking for German state help to survive.
Potsch observed: "If there has to be aid, then (it should be) on a fair basis." Opel had to prove that it could be viable, he said.
Winterkorn said that he expected to see a concentration in the global auto industry eventually.
He forecast that one manufacturer would survive in Japan, one in China, "two or three in Europe" and one in the United States.
And he was confident that Volkswagen would still be there in the fast lane, among the "winners" in the new "champions' league."
Meawnwhile, the annual report published on Thursday showed that Winterkorn himself is in the fast lane: his total remuneration more than doubled last year to 12.7 million euros, owing largely to the exercise of options to buy shares.
In 2007, he earned 5.1 million euros.
Remunderation for the five members of the board was rather more than 45 million euros from 16 million euros in 2007.
The stock options, granted at an advantageous price as a way of rewarding executives if success drives up the value of the business, have risen sharply.
At one point toward the end of last year, Volkswagen shares rose above 1,000 euros per share, owing to heavy speculative trading when Porsche was manoeuvering to gain control of the group. The closing price of VW shares on Wednesday was above 210 euros.
http://www.google.com/hostednews/afp...pz_Z61dph60vXw
The German giant, the biggest auto maker in Europe, is putting its foot down in the fast lane with the intention of becoming the biggest auto group in the world by 2018.
The gap is big, but the fuel tank of profits is powerful.
"I see Volkswagen in pole position ... after the crisis," chief executive Martin Winterkorn told a press conference here in the north of Germany.
"We are staying in the fast lane and the fuel tank is well topped up."
Volkswagen (VW) is the third-biggest auto manufacturer in the world, selling 6.3 million vehicles last year. GM and Totoya each sold rather more than eight million.
But GM is tottering close to bankruptcy despite huge US state aid, and Toyota expects to run up huge losses for its 2008-2009 year to the end of March.
VW, by contrast, made a record net profit of 4.7 billion euros (6.0 billion dollars) in 2008, a disastrous year for leading auto groups in general, and it expects to make a an operating profit this year, albeit less than last year, finance director Hans Dieter Potsch said.
Winterkorn warned, however, that business conditions this year would be "extremely difficult" and that sales would probably fall by about 10 percent.
The group might even report a loss for the first quarter. Potsch said that the latest data pointed in that direction since sales for January and February had fallen by 15 percent from the equivalent figure last year to 809,200 vehicles.
However, this was a smaller fall than that experienced by all sales by auto makers throughout the world which had contracted by 23 percent, VW said, lauding the performance of its small, and low-pollution cars, and the range of its models sold also under the brands of Skoda, Audi, Seat and Scania.
Even the involvement of the regional state of Lower-Saxony with an interest of 20 percent, which has been the subject of controversy for being outdated, is no longer criticised at a time when many governments are rushing to shore up stricken industries, including vehicle makers.
Winterkorn said that "many competitors envy us" because of our long-term shareholders in the form of the regional state and the auto maker Porsche, which holds more than 50 percent of the equity.
However, this did not discourage the group from seeking state guarantees of up to 2.0 billion euros (2.56 billion dollars) from the federal government in Berlin for its VW bank.
And it helps to explain why VW was cautious on Thursday towards the prickly case of Opel, the German and European arm of GM, which is a direct competitor of VW but is looking for German state help to survive.
Potsch observed: "If there has to be aid, then (it should be) on a fair basis." Opel had to prove that it could be viable, he said.
Winterkorn said that he expected to see a concentration in the global auto industry eventually.
He forecast that one manufacturer would survive in Japan, one in China, "two or three in Europe" and one in the United States.
And he was confident that Volkswagen would still be there in the fast lane, among the "winners" in the new "champions' league."
Meawnwhile, the annual report published on Thursday showed that Winterkorn himself is in the fast lane: his total remuneration more than doubled last year to 12.7 million euros, owing largely to the exercise of options to buy shares.
In 2007, he earned 5.1 million euros.
Remunderation for the five members of the board was rather more than 45 million euros from 16 million euros in 2007.
The stock options, granted at an advantageous price as a way of rewarding executives if success drives up the value of the business, have risen sharply.
At one point toward the end of last year, Volkswagen shares rose above 1,000 euros per share, owing to heavy speculative trading when Porsche was manoeuvering to gain control of the group. The closing price of VW shares on Wednesday was above 210 euros.
http://www.google.com/hostednews/afp...pz_Z61dph60vXw
#3
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Good luck VW, I think you're gonna have to dethrone Honda or Hyundai first, let alone GM or even Chrysler...
I think BMW or Daimler is stronger financially than VW - just because Daimler is much more than Mercedes even though they have a minority stake in Chrysler which is a toxic asset.
I think BMW or Daimler is stronger financially than VW - just because Daimler is much more than Mercedes even though they have a minority stake in Chrysler which is a toxic asset.
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BMW and Dialmler are actually at a competitive disadvantage with VW Group's massive economy of scale, which is why you see the two giants talking about so much collaboration. The VW group has a much higher penetration into entry level market share and developing markets with it's endless models from VW along with Seat and Scania, etc. over really Daimler AG and BMW combined. Mind you, VW Group also has a shelf of premium world class upscale marques under the corporate umbrella as well, and their continued operating performance and growth over the last five years have been nothing short of extraordinary. Soo....This is why I'd aruge they are in a far better position than Daimler/BMW (and their profits suggest this as well).
Last edited by FKL; 03-22-09 at 01:40 AM.
#7
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I think it was one of the execs from Toyota who recently said something along the lines of "The era of 'the big three' is over and we think there will be more like six or seven automakers who hold similar shares of the market in the near future."
IMO this is probably correct. I think in the coming years we will see Ford Motor Co., GM, Toyota, Hyundai, VWAG, Nissan and maybe Honda as all claiming a similar sized piece of the pie with other companies like Mazda or Chrysler, if they survive, to pick up what is left.
IMO this is probably correct. I think in the coming years we will see Ford Motor Co., GM, Toyota, Hyundai, VWAG, Nissan and maybe Honda as all claiming a similar sized piece of the pie with other companies like Mazda or Chrysler, if they survive, to pick up what is left.
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#8
I'd buy an Acura, Ford, or Mitsubishi before I bought a VW. My roomates Jetta is a 115 HP dog that gets terrible gas mileage and breaks down frequently.
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^
and my is250 had terrible leather, no fealing of solidaty any where and my c300 loaner 4matic felt way stronger of the line and more precise.... What fuel economy does he get and what breaks down what milage does he have.
and my is250 had terrible leather, no fealing of solidaty any where and my c300 loaner 4matic felt way stronger of the line and more precise.... What fuel economy does he get and what breaks down what milage does he have.
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They'll never do it. Why? Because their US market sales would have to triple or quadruple (yeah right!). Virtually, the only way you can be the world's largest is to do really well in the world's largest auto market - the USA. Doing well in Europe isn't good enough if America isn't being drawn to their product.
I think the two biggest issues with VW is the premium pricing and reliability problems. Two priorities for American buyers. Hence Toyota and Honda's huge success.
Oh, and what's up with such a desire to be the biggest? An automaker shouldn't announce that goal. It should be quality over quantity. Biggest comes with it's problems and biggest isn't always best (GM was biggest for what, 75 years?, and they sucked most of it).
I think the two biggest issues with VW is the premium pricing and reliability problems. Two priorities for American buyers. Hence Toyota and Honda's huge success.
Oh, and what's up with such a desire to be the biggest? An automaker shouldn't announce that goal. It should be quality over quantity. Biggest comes with it's problems and biggest isn't always best (GM was biggest for what, 75 years?, and they sucked most of it).
Last edited by -J-P-L-; 03-22-09 at 05:49 PM.
#11
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Not going to happen anytime soon especially versus Toyota, but I admire their ambitious goals.
I'm still waiting for VW to produce a car that I would actually buy, now there's a goal.
I'm still waiting for VW to produce a car that I would actually buy, now there's a goal.
#12
He has problems with water pumps, the eletrical system, speedo and tach. It's awful.
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Go ahead, find VW on JD's latest list......
Yup, they'll be #1 in no time!
Yup, they'll be #1 in no time!
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SLegacy99, the 2.0L engine in the Golf is a poor engine, you are correct. Unrefined, underpowered, and generally a poor match for the MKIV Jetta. But remember, the available 1.8T was one of the most advanced in the segment at the time, finding itself on the best engine list for years on end (the 2.0T FSI continues upon that legacy.) And VW actually offered a VR6 on the MKIV Golf/Jetta. Sure they were more costly than their direct competition, but the overall fit/finish was at Audi-levels.
#15
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Its an '03 with 70k miles, 2.0L engine. We recently took a road trip. His 115 HP FWD vehicle average 28 MPG. My 170 HP AWD Legacy averaged 31 MPG. Mine's a MT, but still 28 MPG is pretty poor for such a minimal of HP.
He has problems with water pumps, the eletrical system, speedo and tach. It's awful.
He has problems with water pumps, the eletrical system, speedo and tach. It's awful.
My buddy dropped in a ABA 2.slow from a 1995 Jetta into a 1978 Scirocco and that thing hauls.