VW Sees No Slowdown in Demand
FRANKFURT — Volkswagen AG's top labor representative and deputy supervisory board chairman Bernd Osterloh says demand for the company's cars is holding up despite signs of slowing growth in Europe and the U.S., and the company has had to introduce extra shifts in its plants to produce enough vehicles.
"There is no sign that demand is slowing," Mr. Osterloh told reporters late Wednesday. He said the company is struggling to keep up with strong demand and its order intake is enough to keep the company in full production for the rest of this year, reported The Wall Street Journal.
Mr. Osterloh also said Volkswagen, Europe's largest auto maker, is able to react if recession fears materialize and auto markets slump. The company "could easily react to [sales]-volume declines in the two-digit [percentage range]," he said.
"If a crisis is coming, we'll [still] meet our sales-volume target [for] 2018. If there is no crisis, we'll reach this goal earlier," he said, referring to Volkswagen's long-term plan to sell more than 10 million cars and trucks by 2018 as part of its bid to become the world's largest auto maker.
After posting strong first-half earnings last month, Volkswagen and other auto makers reported that the global economic environment had worsened in the course of this year.
Memories are still fresh of the last market slump in 2008, when demand for cars slid amid recession as unemployment rose and credit dried up. But surging sales in emerging markets, particularly in China, helped the auto industry stage a faster-than-expected recovery over the past two years.
Volkswagen is aiming to sell a record eight million cars and trucks in 2011, according to comments made by Chief Executive Martin Winterkorn last month.
The company's core VW passenger-car brand posted a 13 percent sales increase in the first seven months compared with the same period last year. The January-to-July sales figures for the whole group are expected to be released in coming days. Sales numbers for August, however, when the market turmoil highlighted growing economic concerns, won't be released for another two or three weeks.
Volkswagen is benefiting from its large footprint in emerging markets such as China, Brazil and Russia, but the company has also posted solid gains in the U.S. and the anemic European market in recent months.
Thanks to a healthy balance sheet, a strong presence in dynamic markets and a sophisticated system to leverage significant economies of scale between its numerous brands, many analysts view Volkswagen as well-positioned to benefit from growing demand for cars worldwide and more resilient to a possible market downturn than most peers.
Mr. Osterloh reiterated that labor unions want to take a voting stake of up to 3 percent in the company this year, but noted that reaching an agreement with the management is taking longer than expected.
He said VW won't issue new shares with voting rights, but a solution could possibly be found using the company's free float of available common shares.
VW's freefloat fell below 10 percent during a takeover battle with Porsche Automobil Holding SE and the shares were subsequently replaced in the German DAX30 bluechip index by preference shares, which don't carry voting rights.
More Industry

First-Half Dealership Deals Up
Buy-sell activity shows that acquirers are looking for value and scale as many retailers seek to leave an increasingly competitive and complex market, Kerrigan Advisors reports.
Read More →
Kia Closes Out Summer With a Bang
Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.
Read More →
Indiana Dealership Changes Hands
A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.
Read More →
Texas Dealership No Longer in the Family
The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.
Read More →
Genesis Grows California Presence
The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.
Read More →
August Auto Sales a Mixed Bag
An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.
Read More →
EV Market Humming Along
July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.
Read More →
Auto Loan Delinquency Rates Stabilize
Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.
Read More →
EV Sales Recover in Q2
The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.
Read More →
The Cheapest Hybrids to Fuel
The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.
Read More →