For Volkswagen, An Opportunity To Move Upward

Currently the third largest automaker in the world, the Volkswagen Group should surpass General Motors later this year, thanks to GM's rapid decline. VW has been losing business itself, but only at half the rate of GM.

The global automotive industry has been going through one of its worse downturns over the past half century, one where perennial leader General Motors has lost its 77 year old lead as the top selling producer of cars in the world. In early 2008 it was confirmed that the Toyota Motor Company had moved past GM as the world's largest automaker in terms of sales, an effort that came several years earlier than expected.

General Motors' position as the number two automaker may be short-lived as German automaker, Volkswagen, is poised to leapfrog GM. Though VW is seeing its own sales decline, its rate of loss is about half that of GM, meaning Volkswagen could push ahead by the end of 2009.

The Volkswagen Group consists of several brands including mass producers Volkswagen and Skoda, premium brand Audi and Bentley, a line of ultra-luxury cars. The automotive also owns Scania, SEAT and Bugatti, demonstrating just how far-reaching the company is.

Contributing to GM's decline is a sharp downturn in US sales, its primary market. VW has a small slice of the US market, but relies on its European base to drive sales. The company is also making inroads in the Americas, Asia and Africa, among the fastest growing markets in the world. In addition, the automaker is planning to build a new plant in Tennessee, its first American manufacturing plant in twenty years.

GM will likely see its share of the market decrease when its expected sale of Saab is finalized later this year. The automaker is also attempting to sell or shut down Hummer and is cutting back on Saturn and Pontiac. Going forward, GM's US brands will probably include Cadillac, GMC, Buick and Chevrolet while Opel, Vauxhall, GM Daewoo and Holden will comprise some of its European, Asian and Australian brands.

VW's ascendancy to the second spot isn't assured, but with the way that GM is contracting and with its own growth plans in place, its move up the charts will happen sooner or later.

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