VW Is Number One, But Will Toyota Steal The Future? | Teleperformance
VW Is Number One, But Will Toyota Steal The Future?

Despite the disastrous emissions-test scandal of 2015, VW is on top of the world. The German auto group sold 6.23m cars last year from their core group and increased demand in the Americas and China have been helping to offset weaker demand back home in Europe.

Growth for the core VW brand was up 4.2% on 2016 sales and VW executives are bullish – saying openly that they expect to see more growth in 2018. The VW-owned premium brands Audi and Porsche also both posted record sales figures for 2017.

Toyota was a close second to VW globally. They recently announced that 2017 sales were around 10.35m cars worldwide across its Toyota, Lexus, Daihatsu and Hino brands, up 2% on 2016. In China, which is the single biggest market for VW, accounting for around half of all VW-brand deliveries, sales rose 5.9% on last year. VW sales in China are approximately ten times the number of sales the brand achieves in the US.

Clearly China is of critical importance to these major auto companies, but the car marketplace is changing. I can see three major trends developing that might change these sales numbers:

  • New energy demands; customers are looking for electric and hybrid vehicles. Many countries have even started naming deadlines for when they want to ban petrol and diesel vehicles making it even more important to start developing new energy solutions.
  • Self-driving vehicles; Apple, Google, Tesla, Daimler… the list goes on. Almost every major auto or tech company is exploring how to make self-driving vehicles a reality. Some analysts predict that they will be available inside the next few years and Tesla already has a semi-autonomous mode in cars that are available today.
  • Shared ownership; many city-dwellers are choosing to avoid car ownership completely. Services such as Uber and DiDi mean that a taxi is never far away from someone inside a city and car sharing with services such as Zipcar mean that you always have access to a car you can use yourself – even without owning one.

To my mind, of all the major (non-premium) manufacturers, Toyota is ahead on electric vehicles at present. They are working hard to catch up with the extensive research of Tesla, GM, and Nissan and have already announced a plan to launch 10 different all-electric vehicles within the next 2-3 years.

What is even more interesting is that Toyota sees China as the most important testing ground for this electric revolution. All the vehicles will be rolled out in China first before being taken to other markets.

How will this impact on local Chinese brands such as SAIC Motor, Dongfeng, FAW and Chang’an? Even more importantly there are giant companies like VW relying on China for half of all their sales. If the market shifts quickly, and is led by China, then the brands that have good electric vehicles already on the market will be poised to succeed.

I believe that Toyota is really exploring where and how cars will be used in future and they are gambling on a change in China inside the next three years. Will they succeed? It’s still too early to tell and brands like VW don’t see any change taking place in 2018, but it’s time to start listening to the customers closely. How do they want to use their cars in future?

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