Frankfurt: Volkswagen, the world's third-biggest carmaker, aims to boost group vehicle sales by nearly 60 per cent and improve profit margins by 2018 in its drive to unseat Toyota as the world's top carmaker.
The targets approved by the German group's management board yesterday 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 around 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 per cent, to grab 11.4 per cent of the global vehicle market.
Europe's biggest automaker also plans eventually to generate an operating margin of at least five per cent in its core automotive business and a group pretax margin over eight per cent.
Porsche integration
The five per cent margin target does not include the planned integration next year of Porsche, which had to accept a reverse take-over by VW after a daring raid to acquire its much larger peer backfired.
VW's automotive profit margin stood at just 1.6 per cent in the first nine months of 2009.
"The Volkswagen Group is seeking global economic and environmental leadership in the automotive industry by 2018," it said while detailing its so-called "Strategy 2018".
Toyota had to suspend North American sales and production of eight models, including its best-selling Camry, due to faulty gas pedals, an unprecedented move that has damaged its once-sterling reputation for quality.
Volkswagen preference shares were down 0.3 per cent at 60.45 euros by 1409 GMT while DJ Stoxx European car sector index was down 0.6 per cent.
"From today's point of view [the] VW targets sound less ambitious than Daimler's 10 per cent mid-term target for its Mercedes-Benz cars and the eight per cent 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.
Ambition
- 60% aim to boost vehicle sales by 2018
- 8m annual vehicle sales target in the medium term
