Manufacturing News

Chinese brands, VW to gain share, survey predicts

Chinese car brands are expected to increase global market share through 2015, along with Volkswagen AG and Hyundai Motor Co., concludes a survey of senior auto executives by KPMG International.

Chrysler Group LLC is the most likely loser.

In the survey of 200 auto executives, 81 percent predicted Chinese manufacturers will boost their market share in the next five years. Seventy-five percent said Volkswagen's share will rise, and 72 percent expect Hyundai and affiliate Kia Motors Corp. will advance.

Forty-eight percent said Chrysler will cede market share.

"As an individual brand, VW is the big winner," said Mike Steventon, a partner at KPMG and author of the report. "It's the combination of quality and styling that seems to be appealing."

Volkswagen, Europe's largest carmaker, aims to surpass Toyota Motor Corp. as the world's biggest automaker by 2018.

Expanding Chinese companies include Zhejiang Geely Holding Group Co., which bought Sweden's Volvo Cars from Ford Motor Co. in August.

VW and General Motors Co. each had a worldwide market share of 9.7 percent last year, while Toyota led all automakers with an 11 percent share, according to estimates by Andrew Close, a researcher for IHS Automotive in London.

"VW's acknowledged strength is a broad product portfolio from small cars to luxury vehicles," KPMG wrote in the report. "

Through truck brands such as MAN and Scania, they are adding new segments."

With a dominant 13 percent market share in China in 2009, VW also has a "strong base in the world's biggest growth market, " KPMG said. China has surpassed Germany as Volkswagen's largest market since 2009.

Sixty-eight percent of the respondents said Indian brands as a group would climb, while 49 percent predicted BMW AG, the world's leader in luxury-car making, would increase share. KPMG didn't name specific Chinese and Indian brands.

Thirty-six percent predicted GM's share will drop and 33 percent made the same forecast for Mitsubishi Motors Corp., maker of the i-MiEV electric car.

KPMG didn't identify reasons for the lack of confidence in Chrysler, and said GM may be suffering as the marketplace may still be "reacting to its June 2009 bankruptcy filing."

But Chrysler, unlike those automakers forecast to gain share, has a limited presence outside of North America, including fast-growing markets such as China.

The global auto industry continues to face a problem of overcapacity, KPMG said.

China and India both are likely to be overbuilt within five years, according to the executives. More than a quarter said China will have overcapacity of more than 20 percent by 2015, KPMG said.

Most major carmakers have been building plants in China over the past few years, and more are in the pipeline.

Volkswagen Chief Executive Officer Martin Winterkorn plans to double production capacity in China with two new plants, bringing the total to 11. Volvo Cars may add as many as three plants there, CEO Stefan Jacoby said in October.

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