Report: VW to Overtake GM, Become World's 2nd Largest Automaker

Joshua Duval
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For decades GM reigned as the world's largest automaker, a symbol of profitability and the biggest indicator of the manufacturing muscle of the United States. However, the last few years have made any success GM once had seem long ago and far away.

Last year, Toyota nabbed the top spot from GM, and this year Volkswagen may move into the number two position, projects marketing research company R.L. Polk Germany. GM will reduce its production by about 31 percent this year, cutting, slashing, firing and downsizing to become a more manageable entity. Volkswagen, on the other hand, will shave its production by only half as much as the General.

The market research firm says Volkswagen doesn't have to reduce its production as much because the German automaker doesn't have deep market penetration in the U.S., where sales have fallen by almost 40 percent due to an economic recession and consumer credit freeze.

"Volkswagen will therefore overtake ... GM and advance to become the new number two after Toyota," R.L. Polk said in a statement.

R.L. Polk says global production of passenger cars and light commercial vehicles will decline 19 percent, to 52.8 million - the lowest since 1998. It expects output to rebound by 2010, and rise to record levels of 70 million vehicles or more in 2012.

We don't know how anyone can project what sales will be like in such uncertain times, with China surpassing the U.S. as the world's largest auto market, one of the world's largest automakers teetering on bankruptcy, and possible mergers between automotive giants creating new companies. Only time will reveal if R.L. Polk Germany's prediction is accurate.

Source: Reuters

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