VW’s sales in the world’s largest car market grew 16 percent to 3.27 million vehicles in 2013 while GM reported deliveries of 3.16 million in the country last week. Earlier last year, GM vowed to invest $11 billion in its operations in the emerging car market, but despite the efforts, analysts believe GM won’t be able to recapture the top spot in China.
“Volkswagen will probably continue to grow more dynamically in China than GM,” said Frank Schwope, an analyst with commercial bank Nord/LB. “It’s going to remain neck and neck.”
Although it’s already the world’s largest car market, China has much more room for growth as the number of vehicles on the road depicts that only six percent of the country’s population owns vehicles. The opportunity for further growth in China motivated VW to commit $24.9 billion in investments into the market through 2018, bringing the total investment between the two automakers to a whopping $36 billion.
For VW, the largest contributor to its sales in China in 2013 was Audi. With deliveries surging 21 percent, Audi is the most popular luxury brand in China. Buick and Cadillac led GM’s 11 percent sales growth in 2013, while Chevrolet sales grew an underwhelming 4 percent.
To note, GM still has a significant opportunity with Cadillac in the Chinese market — but it will only be fully realized once the entire Cadillac portfolio begins being built locally in the country. This will eliminate the hefty import tariff assessed on most Cadillacs currently sold in China, thereby making them more affordable. Then we’ll see if Chinese luxury car buyers continue to prefer Audi.