China: Volkswagen outsells General Motors for the first time image

For the first time in nine years, VW outdid GM in China and recaptured the lead among foreign automakers in the world’s largest car market.

VW’s 2013 deliveries in the country increased 16 % to 3.27 million vehicles, exceeding those of Detroit-based GM, whose sales rose 11 % to 3.16 million units in China.

Beating GM in China puts VW a step closer to its goal of becoming the world’s largest carmaker by 2018. As the stakes escalate – both have announced combined investment plans totaling $36 billion in the country – they’ll be facing mounting competition from the likes of Toyota or Hyundai at a time when the government is cranking up scrutiny on vehicle sales to combat pollution.

While China may already be the world’s biggest auto market, the country has plenty of room to grow as the number of vehicles on its roads only account for about 6 % of the population, versus 80 % in the U.S. and 36 % in South Korea.

Such opportunities prompted VW to say in November that it will invest 18.2 billion euros ($24.9 billion) in China through 2018. That would help the company double the number of models produced in the country to more than 35, according to VW.

Among the biggest drivers for VW last year was Audi, the top-selling luxury car brand in China, as deliveries expanded 21 % in 2013. The company is counting on sales of the locally produced A3 compact car to spur further gains this year.

Porsche, which outperformed industry growth last year as Chinese consumers snapped up Cayenne SUVs and Panamera sedans, is counting on its new Macan SUV to drive growth in 2014.

Via Bloomberg