Posted by Dale Buss on August 22, 2012 10:17 AM
Fiat CEO Sergio Marchionne served as a proxy for much the rest of the European auto industry a couple of weeks ago when he complained that "the Germans and French" -- presumably including giant Volkswagen AG -- weren't willing to consider production cuts that could help the entire faltering European market reach more of an equilibrium between supply and demand. VW executives rebuffed Marchionne then.
But VW's real revenge seems to be to continue to have its way with the European auto market and, the company hopes, the rest of the world. VW chief Martin Winterkorn has made no bones about the goal of global sales domination over the next few years for Volkswagen. It's already coming to pass in Europe, and VW also is aiming for far more sales and influence in other crucial markets including China and the United States.
In Europe, VW and its brands -- VW, Audi, Seat and Skoda -- now command a market share of 24 percent, up from about 19 percent in 2004, while the VW brand on its own commands nearly 13 percent. Meanwhile, PSA/Peugeot-Citroen, Europe's second-biggest automaker, has dropped to a 12 percent share from nearly 14 percent.
VW has been boosted lately by the appearance of new versions of classic vehicle lines such as its Golf small car and Audi A3 performance sedan. But analysts say that VW will get an even bigger boost in Europe -- and elsewhere -- from rolling out its new platform known as MQB, which will allow VW to make more than 4.6 million vehicles around the world based on one mechanical architecture -- a sort of holy grail for automakers worldwide. Savings of 14 billion euros by 2019 from using the MQB are just one huge benefit.
Meanwhile, VW continues to advance on its recent goal of making the U.S. market a center of strength rather than an afterthought. Building an assembly plant in Tennessee, which opened last year, was one big step. And now the company has opened a $27-million technical center in California in another front in its big American push.
Winterkorn is advancing smartly on his plan to run the world's dominant automaker. And no one can say he didn't warn them.