Volkswagen overtakes Toyota to take the lead in global sales

Volkswagen overtook Toyota in global sales for the first half of 2015, threatening to end the Japanese group's three-year reign as the world's top-selling carmaker.

Toyota — which includes its Daihatsu and Hino subsidiaries — said on Tuesday it sold 5.02m vehicles in the six months through June, less than the 5.04m VW said it had sold in the same period.

Analysts say they are cautious about the full-year outlook for both carmakers amid concerns about the fallout from market volatility in China and slowing or declining growth in emerging economies such as Russia and Brazil.

"The outlook is uncertain and it's difficult to hope for a turnaround in sales for emerging markets in Asia, " said one auto analyst.

The Japanese carmaker's worldwide sales were down 1.5 per cent in the first half compared with the same period last year due to sluggish sales in its home market and emerging markets despite strong sales in North America. VW's six-month sales were also down 0.5 per cent as sales fell in China, traditionally a strong foothold for the German carmaker.

The reversal in market positions comes three years ahead of VW’s target to overtake its Japanese rival by 2018.

Since the recall crisis in 2009 and the global financial turmoil, the focus at Toyota has been on profitability and quality rather than breakneck expansion. Despite slowing sales, the company expects a third consecutive year of record profit and it plans to spend more than $1.4bn to build new plants in Mexico and China, lifting its three-year moratorium on plant construction.

Toyota also plans to launch a new Prius hybrid later this year using revamped vehicle platforms and components, although analysts say the timing is not favourable as declining petrol prices have reduced consumer enthusiasm for alternatives.

Last year, Toyota recorded global group sales of 10.23m cars and trucks, edging out VW at 10.14m vehicles. General Motors sold 9.92m cars. For the year ahead, the Japanese carmaker is forecasting a 1 per cent year-on-year drop in worldwide sales to 10.15m vehicles.

For VW, a key challenge is China where passenger car sales fell 3.4 per cent in June compared with a year earlier, according to wholesale figures compiled by the China Association of Automobile Manufacturers. It was the industry’s first decline since early 2013.

The German carmaker experienced a 3.9 per cent fall in first-half group sales to 1.7m units, the first decline in nine years. For VW, its problems were exacerbated by having just one mass-market SUV on offer in China at a time when the fast-growing segment accounts for one-third of all passenger car sales.

Copyright The Financial Times Limited 2015