Volkswagen may succeed as replacing Toyota as largest automaker

Volkswagen New Compact Coupe Hybrid Concept

Just two years ago, people laughed at Volkswagen CEO Martin Winterkorn”s ambition to zoom past Toyota to become the world”s leading producer of automobiles. At that point, VW sold 3 million fewer cars annually than their Japanese target and had a questionable reputation when it came to quality. Toyota was also just poised to overtake GM as the world”s leading producer and seemed untouchable.

Such is not the case today. This past November marked the first time that VW out-built its Japanese rival and while ToMoCo still moves more units per year, VW has closed the gap by half. The quality issue still remains a point of contention for VW, but a series of damaging recalls by the Japanese magnate received much unwelcome attention from the American public.

Winterkorn is seizing the opportunity presented by Toyota”s negative press, and has pulled out all stops. VW has made a deal whereby they are to purchase a 20% stake in Suzuki in a move to target the explosive markets of Southeast Asia and India. He has also committed over $11 billion to Audi over the next three-years to take on BMW and Mercedes-Benz with the introduction of 10 new models.

In the U.S., Winterkorn plans to try the inverse of the failed upmarket attempt that is known as the VW Phaeton and moving in on Ford, Honda, and Toyota customers as the company gets set to introduce a competitor to the $16,000 Toyota Corolla later this year.

– By: Stephen Calogera

Source: BusinessWeek