VW reveals plans to topple GM and Toyota

The global economic crisis has taken its toll on virtually every major carmaker around the globe but the effects have varied significantly between firms. General Motors’ financial predicament has been well documented, with the ailing Detroit carmaker teetering on the edge of bankruptcy.

Toyota, too, has been hit hard by the crisis, with the usually unstoppable Japanese carmaker expecting its first loss this year after nearly seven decades of profit. Toyota announced last month that it has forecast a $4.95 billion loss for the past year – down from an $18.9 billion net profit the previous year.

Volkswagen, on the other hand, posted a record net profit of $6 billion for the past year, and is still expecting to be profitable in 2009 despite analysts predicting the year to be one of the worst on record for the auto industry.

CEO Martin Winterkorn revealed at a recent press conference that VW will is aiming to be the biggest carmaker in the world within nine years, and expects to be the most profitable by the end of the current financial crisis. "We are staying in the fast lane and the fuel tank is well topped up," he boasted to reporters.

VW is currently ranked third behind GM and Toyota. Last year it sold 6.3 million vehicles, while GM and Toyota both sold more than eight million vehicles, but if it truly wants to overcome its rivals then VW will need to boost its profile and sell more cars in the U.S. market. Despite a significant decline in sales expected for 2009, the U.S. will almost certainly remain the world’s most lucrative market for some years to come and it is one VW is yet to breakthrough in.

Some plans in the pipeline include the opening of a new plant in Tennessee, as well as the development of several U.S. specific models, the first of which will be a midsize sedan to take on the Honda Accord and Toyota Camry.

As for the future of the industry, Winterkorn told Reuters that he expects sales worldwide to continue to fall and that a likely outcome would be the formation of more alliances. He said he expected to see a greater concentration in the global auto industry eventually, with only one survivor in Japan, one in China, two or three in Europe and one in the United States. Bold statements but one that echoes comments made by Fiat CEO Sergio Marchionne last month, who predicted that only six carmakers would survive in the longer term.