BEIJING - German car maker Volkswagen Group said on Thursday that its 2006
sales in China climbed by almost a quarter, but it made a conservative forecast
on the growth of the world's No 2 vehicle market this year.
The group, which runs two car ventures in China, sold 711,298 vehicles in the
nation last year, up 24.3% from 2005, it said.
Volkswagen Group's China chief Winfried Vahland said the group
also achieved its other two China targets last year, stabilizing market share
and regaining profits.
It grabbed 17% of China's passenger car market last year, equal to the level in
2005, Vahland said, without revealing a specific financial result.
He hailed 2006 as a "turnaround" for the car maker's China operations, as the
group suffered a plunge in sales and market share and made losses in the nation
over the previous two years.
The group's 2006 sales of 628,807 Volkswagen-branded cars and 81,708 units
under the Audi marque consolidated its position as top seller of passenger cars
in China for the past two decades and maintained the nation's place as its
second-biggest market after Germany.
China last year overtook Germany as the world's top market for the Volkswagen
brand for the first time, Vahland said. In Germany, the group sold 1.11 million
cars last year, including 571,000 units under the Volkswagen badge. Sales of
all China-made vehicles rose by a quarter to 7.22 million units last year from
2005, including 4.25 million passenger cars, according to data from the China
Association of Automobile Manufacturers.
But Vahland, also executive vice president of the Volkswagen Group, predicted
that car sales in China will grow at a slower pace of 7-12% this year, partly
because fewer all-new models will be launched. Car makers will launch about 30
all-new models in China this year, down from 63 last year and 55 in 2005,
according to figures he provided.
Vahland said Volkswagen Group expects to increase sales and profitability in
China this year. But he declined to give detailed figures.
"For me, profits are more important than sales growth," he said.
The car maker will launch a Skoda Octavia compact sedan at the venture with
SAIC Motor Co Ltd this quarter and a Volkswagen Magotan medium-sized sedan at
the other partnership with First Automotive Works Corp in May, according to the
two ventures.
To generate more profits, Volkswagen Group will continue to cut costs in China,
mainly through raising the ratio of locally made parts used in its vehicles,
Vahland said.
According to Volkswagen's plan revealed earlier, it aims to cut China costs 40%
by 2008 from 2005.
"We will speed up our decision-making process in China, as it is the world's
most competitive and fastest-changing car market, where more than 60 brands are
contesting," Vahland said.
Japan's Honda Motor said on Thursday that its China sales grew by a quarter to
323,469 cars last year.
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