With the vehicle sales slump in North America as well as the saturated Western Europe market, carmakers are increasingly depending on developing markets for growth – ‘developing’ usually refers to Eastern Europe, ASEAN as well as the BRIC nations – Brazil, Russia, India and China.
Confirming this is the news that Volkswagen will be investing a total of 2.3 billion euros in new products and manufacturing capacity expansion in Brazil from now till 2014. VW’s Brazilian factory already produces 3,000 vehicles per day, making it the country’s largest carmaker. With the expansion, the Wolfsburg based company aims to sell one million vehicles annually by 2014. Volkswagen do Brasil production is at 800,000 vehicles this year and the brand’s current market share is 25.7 percent.
Spearheading this initiative is 26 new products for 2009/2010. Over the last two years, Volkswagen have rejuvenated its Brazilian range with the introduction of the new Gol, Saveiro, Voyage and Fox.
VW’s developing market strategy has long taken root in China, where it is a major player – the ubiquitous Santana saloon is almost like China’s ‘national car’ – and for our region, a US$140 million investment in an MPV assembly plant in Indonesia was announced in July this year. Makes us wonder what might have been if Malaysia did not have a local industry to protect.