Toyota Bests Volkswagen as Bestselling Auto Brand, but Faces Uphill Battle in China
Li Suwan
/SOURCE : Yicai
Toyota Bests Volkswagen as Bestselling Auto Brand, but Faces Uphill Battle in China

(Yicai global) June 09 -- Volkswagen Group [ETR:VOW3] (VW) overtook Toyota Motor Corp. [TYO:7203] as the world's bestselling carmaker last year.

The Japanese company has managed to regain the number one position thus far this year, with the Chinese market deciding whether it keeps its lead throughout the year.

Toyota's global production volume grew 7.8 percent to 3.53 million units in the first four months of this year, outranking all other carmakers, Forbes.com reported.

With Mitsubishi under its belt, the Renault-Nissan Alliance also increased production by 7.4 percent (3.47 million units) to take second place, followed by VW with a worldwide production volume of 3.34 million, down 0.7 percent annually.

All the three front-runners have the potential to become the world's bestselling carmaker by year's end. As the globe's largest car market, China will prove pivotal in their final rankings. The German giant unseated Toyota as the world's largest automaker last year, largely because it held a clear lead in China. Its sales in the second-largest economy have sagged in recent months, but Toyota still lags behind both VW and Renault-Nissan in Chinese sales, so an uphill fight is inevitable in China if it is to remain top in the world.

VW sold 1,191,200 cars in China In the first four months through April, down 4.8 percent year-on-year. Toyota's sales rose 4.5 percent to 517,100, and Nissan sold 531,800 cars, up 6.2 percent. Toyota's luxury car division, Lexus, posted an impressive 33 percent increase in Chinese sales to 49,900 units in the first five months this year. However, Lexus is not locally produced and therefore does not have any clear cost or branding advantage over VW's Audi or Nissan's Infiniti, which were localized in 1988 and 2014, respectively. Toyota now pins its hopes for up-branding in China on Toyota Crown.

At the branding level, Crown has always remained Toyota's premium sedan brand, said Kazunari Iguchi, vice president at FAW-Toyota Sales Company, at a press interview, adding that as Toyota's premium luxury car brand Crown has priority over the company's other product lines for the latest technology applications. Unlike other luxury car brands, he noted, Toyota Crown only has one model, which explains why it trails other mainstream luxury brands in overall sales. However, judging by single-model performance, Crown has always remained one of the bestselling and most popular luxury cars in the world.

"Toyota Crown sold 35,000 cars last year, beating its yearly target. This year, we set the minimum target at 31,000, and will endeavor to further improve Crown's sales performance. We managed to sell 7,703 Crown cars in the first quarter despite the Chinese New Year holiday, and I believe that sales will continue to increase steadily driven by a series of marketing promotions throughout the year. We're well on track to fulfill the full-year sales target," Iguchi said, adding that branding is the top priority in Crown's marketing strategy this year.

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Keywords: Auto , Toyota , Nissan Renault Alliance , VW