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Volkswagen ends rollercoaster year on a hopeful note

| Updated on: Jan 14, 2016
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An illuminted Volkswagen (VW) logo sits atop the VW factory in Wolfsburg, Germany December 10, 2015. German car maker Volkswagen will publish intermediate results from the inquiries it launched in September after admitting to cheating diesel emissions tests in the United States, later today.  REUTERS/Nigel Treblin

An illuminted Volkswagen (VW) logo sits atop the VW factory in Wolfsburg, Germany December 10, 2015. German car maker Volkswagen will publish intermediate results from the inquiries it launched in September after admitting to cheating diesel emissions tests in the United States, later today. REUTERS/Nigel Treblin

CEO says the job on hand is to focus on ‘Strategy 2025’

It is a year that Volkswagen would rather forget in a hurry. The group ended 2015 with sales of 9.93 million vehicles, a fall of 2 per cent from the preceding year’s tally of 10.14 million units.

The irony is that VW had raced away as the world’s top carmaker in the first half of 2015, ahead of Toyota which has decided to steer clear of capacity expansions for now. The German carmaker had further reason to celebrate since it had attained the top slot comfortably ahead of its original 2018 target.

The script, of course, went completely awry in the second half of 2015 when the emissions scandal broke out in the US and VW’s drive downhill began. Martin Winterkorn, the CEO with the Midas touch, resigned and in his place came in Matthias Müller who was entrusted with the massive responsibility of a cleanup exercise.

From his point of view, the top priority is ‘Strategy 2025’ which will focus on a modern VW. Little wonder that Müller was stoic about the tally for 2015 even though it marked a fall.

“Delivering almost 10 million vehicles is an excellent result, particularly in view of the continued challenging market situation in some regions as well as the diesel issue in the final quarter of last year,” he said.

Home run

The good news came from home market, Germany, where deliveries were up 4 per cent to 1.29 million vehicles. Likewise, the US which blew the whistle on the scam saw numbers up 1.2 per cent to 6.07 lakh vehicles. The Group also reported increases in other parts of Western Europe with growth particularly strong in Spain (+16.1 percent) and Italy (+8.8 per cent). China, which is VW’s largest market, saw a fall of 3.4 per cent to 3.55 million vehicles. “We will continue to deliver vehicles that suit the needs of our Chinese consumers with a strong focus on SUVs, new energy vehicles and connectivity,” said Jochem Heizmann, President and CEO of Volkswagen Group China.

“By the first quarter of 2016, we will have the largest product offering with 150 models covering all brands and segments,” he added.

The other markets of concern to carmakers are Russia and Brazil. These are tottering right now with no signs of a quick recovery. In the case of VW, Brazil crashed 38 per cent to 3.9 lakh vehicles while Russia was down a staggering 36.8 per cent to 1.75 lakh units. According to the Group website, the tense situation in Russia continued to impact deliveries in Central and Eastern Europe.

“While developments on markets in Brazil and Russia had a noticeable impact on deliveries by our brands, we made advances in Europe. We also recorded further growth in the North America region and in the US,” said Müller. In his view, 2016 will be no less challenging as the company copes with world markets where trends remain mixed. “It is our wish and intention to systematically make the Group fit for a successful future,” added the CEO.

Even while India remains a small market for VW, the company would be more than happy to set things right quickly.

For one, the country is relatively stable in a highly volatile world where other emerging markets are haemorrhaging.

VW, however, has found the going tough and is now attempting to put things in place with a more dynamic product line-up which will include a compact sedan to be showcased at the Delhi Auto Expo next month.

Published on January 19, 2018

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