VW a ‘good chance’ of hitting 10 million sales

UPDATED 13:25 EUROPE’S largest car-maker, the Volkswagen Group, is aiming to sell a record 10 million new vehicles across its portfolio of brands in 2014 – four years ahead of target.

VW Group chief executive Martin Winterkorn told the company’s annual analyst and media briefing overnight that there was a "good chance" the German car-maker could reach the figure after falling short by 270,000 sales in 2013.

No car-maker has ever reached 10 million sales. However, Volkswagen stands to be one of at least two companies to reach the figure in 2014, with Toyota stating in January that it aims to sell 10.4 million cars this year after managing 9.98 million last year.

The battle to see which of the two car companies takes the number one spot promises to be a close one. In addition, US giant General Motors sold 9.7 million cars in 2013, up 4 per cent, to finish in second place.

In the first two months of this year, VW’s global sales are already up by 4.7 per cent on 2013, with the brand flagging it will expand its 310-vehicle portfolio with up to 100 new or updated products this year alone to fuel buyer interest.

"We are expecting a moderate increase in deliveries (for the whole of 2014)," Dr Winterkorn said, adding that a 10-million sales target was “cautious”.

“That (10 million sales) figure would be an important milestone in our success, creating additional motivation for us in our trajectory towards 2018.” Dr Winterkorn said 2013 was “extremely challenging, especially for European car-makers,” and that “in light of the uncertainties, our forecast (for 10 million-plus sales) for 2014 is comparatively cautious”.

Volkswagen’s wary optimism comes as the car-maker reported a 11.7 billion euro ($A18 billion) profit for the 2013 calendar year, a modest 1.5 percent rise over its 2012 result.

Of significance, though, was the contribution made by its premium sportscar brand, Porsche, which earned almost as much revenue last year as VW’s passenger car division – 2.58 billion euro compared with 2.89 billion – despite Porsche selling only 155,000 cars against VW’s 4.7 million. In 2012, Porsche contributed only 943 million euro to VW Group’s bottom line.

Porsche aims to lift its sales well past the 200,000 mark by 2015, based largely on the strength of its Macan compact sports-focussed SUV that is launching globally now.

SUV sales at the brand, which includes the larger Cayenne, are expected to account for seven out of every 10 new cars wearing its badge this year alone.

The success of the high riding, off-road-styled vehicle hasn’t been lost on Volkswagen, which aims to add up to another four SUV models to its existing Tiguan and Touareg range, including a vehicle based on the T-Roc concept car shown at Geneva, and the Taigun compact SUV due next year.

However, Volkswagen’s aggressive new-model push won’t necessarily translate into a big jump in showroom choice for Australian buyers, with the car-maker confirming that we will miss out on the Taigun, as well as a range of new or imminent electrified vehicles until the market is more accepting of them.

Audi, which has narrowly eclipsed Mercedes-Benz as the world’s most popular luxury badge for the first two months of this year and counts sub-brand Lamborghini’s sales as its own, remained the VW Group’s most profitable brand, earning it 5.03 billion euro – although down more than 330 million euro on 2012’ s result. Premium brand Bentley built on 2012’s result with a 68 billion euro lift in profit to 168 billion euro.

However, the $A5.6 billion total buyout of Porsche, and a number of currency and business reporting adjustments worldwide, meant the car-maker post a 2.72 billion euro run of red ink to offset the vehicle-making division’s strength.

Volkswagen’s financial services arm earned 1.61 billion euro in 2013, an almost 15 percent increase on 2012, generating more income than the commercial vehicle business, Skoda, and the loss-making Seat brands combined.

From a local perspective, the German brand said it hedged significantly in the Australian dollar to offset any rise or fall in other currencies worldwide.

Volkswagen also revealed its Australian finance arm had established a public company, Driver Australia One, which listed on the Australian Stock Exchange in December to raise $500 million earmarked for new- and used-car loans.

The public float in Australia follows on from similar fund-raising arrangements established in several other world markets in 2013. As of the end of February, the trust had secured 16,499 contracts, documents filed with the ASX show, based on 13,968 new vehicle and 2531 used vehicle sales.

The VW Group’s annual report shows its best-selling car was the Jetta compact sedan, which sold more than 925,000 units in 2013 based largely on the cars popularity in China. The Golf hatchback was the brand’s second most popular model, selling more than 837,000 units worldwide. Third place was taken by the Passat mid-size range, which accounted for 759,000 deliveries.