VW to Lose Top Spot on Chinese Market

US auto giant General Motors is snapping at the heels of the German car manufacturer Volkswagen, which is likely to lose its position as top dog on the Chinese market next year, analysts and industry consultants say. Volkswagen sold 220,774 passenger vehicles in the first half of this year for a 13.6 percent share of the China market, but this is forecast to slip to 10 percent over the next three years. According to Automotive Resource Asia, Volkswagen will cling on to a slight lead in sales volume this year with 360,000 units, followed by GM and Hyundai, both with sales of around 300,000. GM is then expected to take the top spot with a 10.9 percent share for 2006. Volkswagen, which 20 years ago ventured into China as the first Western auto manufacturer, was rewarded for its vision with years of near monopoly of the government and taxi market. But now, with scandals and financial troubles at home and bloated management in China, the company is struggling. Volkswagen's joint ventures in China -- Shanghai VW and First Automotive Works VW -- recorded an operating loss of 23 million euros ($19 million) in the first half of this year compared with a profit of 251 million euros for the same period in 2004.