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Volkswagen hope Golf will drive growth

Monday, September 03 15:08:34

Volkswagen is hoping a sleek makeover will keep its Golf in the best-selling compact car spot, helping the German automaker overtake Toyota and GM as the world leaders.

In Ireland, the company said it was the top-selling passenger car brand in August claiming the No 1 position with 482 registrations, a market share of 15.5pc.

So far this year Volkswagen Ireland has registered 9,357 vehicles representing a market share of 12.6pc up 0.3pc on 2011. This means that Volkswagen is now the top-selling car brand in Ireland for the first time in recent history. However, globally, the mid-range Golf faces an onslaught of competition from cheaper and premium models, just as car makers grapple with an economic slump in Europe and slowing growth in China.

VW has reported record deliveries and higher profits while rivals have struggled. However the seventh-generation Golf, to be unveiled in Berlin on Tuesday, may not be enough to keep Europe's biggest automaker on its winning streak, analysts say.

"Success of the new Golf is absolutely critical to VW's expansion targets but the new version will be battling in a tough environment," said Stefan Bratzel, head of the Center of Automotive Management think-tank near Cologne, Germany.

Volkswagen is on course to bump General Motors into the world no.3 ranking this year. It aims to sell a world-leading 10 million vehicles by 2018, up from the 8.36 million recorded last year, and push past Toyota.

The new hatchback will boast a range of features aimed at luring buyers away from cheaper rivals made by Hyundai, Skoda and Seat, volume makers including Peugeot Citroen and GM's Opel division, as well as from Audi and BMW at the top end.

Pricing has not yet been announced for the new Golf, which will be sleeker and more than 100 kilograms lighter than its predecessor, thanks to increased use of ultra-strong steel, making it cheaper to run and cutting emissions.

The 140-horsepower petrol version will produce an average 112 grams of CO2 per kilometer, complying with European Union targets. It will also be 2.24 inches longer and 0.52 inches wider than its predecessor, enlarging the interior to compete more effectively with SUVs and minivans.

To attract luxury buyers, VW is touting a higher quality cockpit finish with more screens and driving assistance gadgets aimed at fending off a sporty replacement of Daimler's Mercedes-Benz A-Class and the new BMW 1-Series introduced last year.

This may still not be enough to keep the competition at bay.

"The European (compact) market is fully saturated and the Golf keeps attracting competition, even from within the VW group," said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen, citing the Audi, Skoda and Seat brands.

"It's no synonym for future growth." (C ) Reuters and BusinessWorld.ie