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Weekly News Review | 6 February 2017 | Automotive Purchasing and Supply Chain Automotive Purchasing and Supply Chain

Talking Point

Scandal - what scandal?

Against all odds, Volkswagen has taken the top spot from Toyota, claiming the title of the world’s largest automaker. After a four-year reign, Toyota announced a slowdown in its annual growth, posting a slim 0.2% rise to 10.2 million sales, in comparison to the VW Group’s 3.8% rise in the year that totalled 10.3 million units. After going head-to-head for many years, VW has finally stolen the crown from Toyota, thanks to ex-CEO Martin Winterkorn’s aggressive expansion plan that began a decade ago and has seen a great increase in demand, most notably overseas in China and the US. Toyota, on the other hand, has suffered in key markets like the US, posting a 2% decline in sales there.

This comes as a surprise to most in the industry, who expected the German automaker to be hit hard by the pressure of dieselgate. Vehicle buyers, dealers and authorities have all taken action over the scandal, which has tangled the brand up around the world in multiple lawsuits that will not stop anytime soon. VW has also seen a significant amount of top-tier executives departing the company, including Winterkorn of course, which could have impacted on group sales. Due to these issues, VW has had to make cutbacks, dropping a number of model variants and restructuring global operations, yet it still continues to thrive as if nothing happened. These sales figures truly depict how little consumers actually care about extremely worrying issues in the automotive world like this, still purchasing vehicles despite the company’s wrongdoings. Even though investigations into the emissions cheating device continue, VW is recovering from the heavy setback that let Toyota retain the crown the previous year and looks to continue its run of form, even more so with US President Donald Trump’s attack on the Japanese automaker over Mexican production.

However, Toyota still remains far in front of VW in terms of brand sales, selling over 8.5 million passenger and commercial vehicles. This figure towers over its German rivals, who only delivered 6.5 million VW-badged cars; Toyota’s total is nearly one-third more. The VW brand itself only accounted for 63% of its total shipments, whereas the Toyota brand accounted for 84% of its group sales. This poses the question: what is the best way to measure who is the world’s largest automaker?

Quite simply, profit is the most efficient way to truly illustrate a company’s success in the global market, closely followed by production. VW has clearly wrestled the crown from Toyota but I am sure the runner-up will already be preparing for yet another battle at the top.

Alex Kreetzer

Alex Kreetzer - Digital Editor

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