Done. VW crosses 10 million mark in 2014, stays #2 worldwide, #1 in China

Geschafft! Winterkorn in Beijing, where the battle was won

Geschafft! Winterkorn in Beijing, where the battle was won

Volkswagen achieved its “first goal of Strategy 2018” by crossing the 10 million unit threshold in 2014. On a group level, Volkswagen delivered 10.14 million units, including heavy trucks and buses by group companies MAN and Scania, the company said in a statement today. Volkswagen beat GM again in China, solidifying its leadership in the world’s largest car market with 3.68 million units vs. GM’s 3.53 million. Worldwide, Volkswagen remains in the #2 slot.

Volkswagen Group 2014 by regions (units)
2014 2013 YoY
Europe 3,950,000 3,750,000 5.1%
Western EUR 2,030,000 1,900,000 7.2%
Germany 1,240,000 1,190,000 4.5%
Central and Eastern EUR 670,900 668,300 0.4%
Russia 275,800 316,000 -12.7%
North America 891,900 890,600 0.2%
USA 599,700 611,800 -2.0%
South America 795,700 992,300 -19.8%
Brazil 629,800 755,200 -16.6%
Asia-Pacific region 4,060,000 3,650,000 11.3%
China 3,680,000 3,270,000 12.4%
Total Global 10,140,000 9,730,000 4.2%


The battle was won in China, Volkswagen’s (and GM’s) largest single country market, where both grew at a 12% clip.  By mentioning the “first goal of Strategy 2018,” Volkswagen conceded, at least to insiders, that it did not dominate Toyota in 2014, yet. Toyota will announce towards the end of the month, however, carefully crafted noises emanated from its Tokyo HQ, reiterating Toyota’s old plans “to deliver 10.2 million units in 2014.” According to past practice, and the Daily Kanban’s estimations, it should be slightly more. (We projected VW at 10.13 million in our latest model, missing the actual 10.14 by a rounding error. We begged Toyota not to make our projected 10.33 million look bad. No comment was received.)

When Martin Winterkorn took the helm at Volkswagen in 2007, he presented to the Supervisory Board his “Strategy 2018.” It was a plan of world domination by that year. Goal #1 was to deliver more than 10 million units worldwide by 2018. Goal #2 painted a big target on world leader Toyota. The plan was to overwhelm Toyota, not just in units, but in profitability, innovation, customer satisfaction, everything. In 2018, we will rule the world.

When the plan was discussed at a closed-door 2007 Volkswagen manager conference, most attendees rolled their eyes and denounced (at the bar) the plan as the usual hubris of an incoming CEO. According to an old in-house rule in Wolfsburg, grand announcements from the top are to be ignored for at least a year, because they are usually followed by new and different ones.“When they keep repeating the goal after a year or two, then it’s time to listen,” was the wisdom imparted on me when I did a lot of time in Wolfsburg.

Volkswagen Group 2014 by divisions (units)
2014 2013 YoY
Volkswagen Passenger Cars 6,120,000 5,930,000 3.2%
Audi 1,740,000 1,580,000 10.5%
Porsche 189,800 162,100 17.1%
SKODA 1,040,000 920,000 12.7%
SEAT 390,500 355,000 10.0%
Total Passenger Vehicles 9,480,300 8,947,100 6.0%
2014 2013 YoY
MAN 120,100 140,300 -14.4%
Scania 79,800 80,500 -0.8%
Volkswagen Commercial 446,600 462,400 -3.4%
Total Commercial vehicles 646,500 683,200 -5.4%


Winterkorn and his lieutenants kept repeating “Strategy 2018” year after year, meeting after meeting, and soon it became the company’s mantra. The Toyota part was never publicly admitted, because among real carmakers, it is considered bad form to comment on competitors, let alone paint big bulls-eyes on them. Also, 10 million are 10 million, but Toyota is a moving target, you never know.

When the 2012 numbers were in, showing Toyota at 10.1 million, and Volkswagen at 9.3 million, dread about the strategy’s wisdom ensued in Wolfsburg. Managers announced early victory, and their desire for a new strategy. “Strategy 2018” was repainted in camouflage colors. It was renamed “Mach 18,” meaning eighteen times light speed in the usual managerial lordliness-language, but also “do it by 18” in German. CYA: If we don’t do it by 18, we claim we meant we have to move fast.

Fast forward to the now. Forget haughty “Mach 18.” Strategy 2018 rules again. Its first goal has been mastered, and the ominous “second goal of Strategy 2018” is within reach. Staying on its current trajectory, Volkswagen should out-produce Toyota this year.

Toyota's new factory plans

Toyota’s new factory plans through March 31, 2016


Volkswagen receives help from an unexpected ally, from Toyota. Perplexing its peers, Toyota stubbornly refuses to grow. In a strategy completely opposed to that of VW, Toyota keeps reiterating its anti-expansionist strategy, and announces again and again that it won’t build new car factories until 2016 at least. Volkswagen on the other hand will pour $106 billion into “new models, technologies and production facilities in the coming five years.”

It’s a classic stand-off between longs and shorts. While VW is aiming for the skies, Toyota bets that the skies might, if not quite fall, but at least get very cloudy in the next few years, and it doesn’t want to sit on idle factories as in the times after the 2008 carmageddon – a mantra one can hear within the halls of Toyota at least as often as “Strategie 2018” in the sprawling offices of Wolfsburg.

With Tomoco in #1 and VW in #2, GM also stays in #3.