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Automobiles

VW set to keep global top spot on strong China sales

German automaker posts gains in a sagging auto market

Volkswagen holds a ceremony to mark the start of production of electric model ID.3 in Zwickau, Germany, on Nov. 4.   © Reuters

FRANKFURT, Germany -- Volkswagen is on track to defend its title as the world's leading automaker in terms of unit sales, thanks to an increase in China despite difficult conditions in the largest market.

The German automaker said Tuesday that it sold 10.97 million new vehicles in 2019, up 1.3% from the prior year.

Whether Volkswagen was No. 1 for the fourth consecutive year will depend on the results of Toyota Motor and the three-way alliance among Renault, Nissan Motor and Mitsubishi Motors. Toyota said last month that it expects to sell 10.72 million vehicles in 2019, while the Franco-Japanese alliance has been struggling. So it is very likely that Volkswagen came out on top.

Volkswagen beat its 2018 total by 140,000 units, despite having projected in October that 2019 sales would be roughly unchanged from the prior year. This is largely due to a strong showing in China. Its sales there, including Hong Kong, rose 0.6% to 4.23 million vehicles, accounting for 39% of the automaker's total and on par with Europe. For Volkswagen, the Chinese market is the most profitable and holds the key to its overall performance.

Volkswagen accomplished this in a Chinese auto market that is clearly in the doldrums. Overall sales in the country fell 8.2% in 2019, down for the second straight year, on concerns over the economy amid a trade war with the U.S. Volkswagen notched sales growth there despite such conditions thanks to a successful product strategy. In the arena of SUVs, which did not decline as severely as sedans, Volkswagen debuted eight models, including five assembled locally.

But there are some signs of trouble in China in 2020, as sales of Volkswagen's environmentally friendly autos have been sluggish. According to an industry group, 2019 sales of so-called new-energy vehicles --such as electrics -- declined for the first time in China, falling 4% to about 1.2 million autos after cuts in government subsidies.

Volkswagen has been investing heavily in new-energy vehicles. Its lineup in China included 14 electric vehicles and plug-in hybrids as of the end of last year. This year, it plans to bring online two EV plants with a total annual capacity of 600,000 units, expanding its lineup of new-energy vehicles to at least 30.

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