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Volkswagen sets targets to dethrone Toyota

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Volkswagen sets targets to dethrone Toyota

February 2, 2010 14:01 CET

FRANKFURT (Reuters) – Volkswagen AG, the world's third-biggest carmaker, aims to boost group vehicle sales by nearly 60 percent and improve profit margins by 2018 in its drive to unseat Toyota Motor Corp. as the world's top carmaker.

The targets approved by the German group's management board on Tuesday underscore VW's ambitions to seize the industry lead before the decade is out.

Its plan is getting an unexpected boost from Toyota's quality stumbles that have knocked one of the Japanese juggernaut's key selling points.

VW earmarked vehicle sales of 8 million in the medium term, rising to above the 10 million mark by 2018. It sold 6.3 million vehicles last year, up 1.1 percent, to grab 11.4 percent of the global vehicle market.

In 2009, Toyota sales fell 13 percent to 7.81 million. Toyota forecast group-wide sales to rise to 8.27 million vehicles in 2010, still well short of the record 9.37 million units it sold in 2007.

VW, Europe's biggest automaker and global No. 3 behind Toyota and General Motors Co., also plans eventually to generate an operating margin of at least 5 percent in its core automotive business and a group pretax margin over 8 percent.

The 5 percent margin target does not include the planned integration next year of Porsche, which had to accept a reverse takeover by VW after a daring raid to acquire its much larger peer backfired.

VW's automotive profit margin stood at just 1.6 percent in the first nine months of 2009.

"The Volkswagen Group is seeking global economic and environmental leadership in the automotive industry by 2018," VW said in a statement detailing its so-called Strategy 2018.

"From today's point of view (the) VW targets sound less ambitious than Daimler's 10 percent mid-term target for its Mercedes-Benz Cars and the 8 percent EBIT target for BMW automobiles in 2012," DZ Bank analyst Michael Punzet told clients.

One Paris-based analyst wondered how seriously to take the comments, which come a day before VW meets analysts in London.

"I'm not sure if there's much point in a carmaker fixing objectives for 2018," he said. "I understand that carmakers have to look far ahead because they invest in technologies that take several years to develop, but I don't really see the point of a plan for 2018."

The Porsche marque will be the 10th brand in VW's stable that already includes Audi, Bugatti, Bentley, Lamborghini, Skoda, Seat and Scania.

Read more: http://www.autonews.com/article/20100202/ANE/302029960/1401#ixzz0eOTUMwHG

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VW has set very ambitious goals, and I actually like that! Re the 2018 timeframe, that Paris-based analyst might want to try and learn that unless you actually have an intelligent comment to make, the best course of action is to keep your mouth shut...

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