Market opportunities

From the point of view of the Volkswagen Group, the greatest growth potential in the future will be in the Indian, Russian, US and ASEAN markets, in addition to China. However, attention will have to be paid to the extent to which the global financial crisis affects these markets as well.

India is one of the most important emerging markets in the world. Passenger car sales will grow from 1.2 million units in 2008 to more than double that figure in the next ten years. India will therefore be one of the world’s key automotive markets in the future. The construction of new manufacturing capacity in Pune, India, offers us particularly strong growth opportunities. Production of Škoda and Volkswagen Passenger Cars brand models is expected to begin there in 2009. Moreover, the Volkswagen Passenger Cars brand will also manufacture a vehicle that is specially tailored to the needs of Indian customers in Pune.

In Russia, vehicle sales will continue to grow in the medium term, which will make Russia one of the largest automotive markets in the world. Since 1996, the Volkswagen Group has been importing and distributing vehicles successfully there via its own sales company. In order to leverage the opportunities offered by the Russian market, we have built a plant in Kaluga, 160 km southwest of Moscow. Volkswagen Passenger Cars and Škoda brand cars are already being assembled there. Full production will begin with body construction, painting and assembly in 2009.

One of the Volkswagen Group’s goals is to sustainably develop the ASEAN market. The automotive markets in the region as a whole possess enormous growth potential. The various automotive markets in the ASEAN region are extremely heterogeneous. Whereas the Thai market is dominated by pick-up models, the multi-purpose vehicles (MPV) segment is particularly prominent in Indonesia. Due to the legal framework in the region, these markets can only be developed sustainably through local assembly or production. We are therefore investigating various options for achieving our goals in this region.

The US automotive market is the largest in the world. Vehicle sales in 2008 amounted to 13.2 million units (passenger cars and light commercial vehicles). The Volkswagen Group aims to transform its operations here from a niche player to a volume supplier offering local production of market-specific products and efficient sales structures. The Routan MPV marked the start of a model initiative in 2008 that is being driven forward with additional vehicles specially developed for the US market. The construction of a local manufacturing plant in Chattanooga, Tennessee, is designed to ensure the sustainable development of the US dollar area. Among other things, this move aims to minimize sales risks arising from exchange rate fluctuations. Production at the Chattanooga plant is scheduled to begin in 2011.

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