COMMENT: Volkswagen: tough targets for new Golf

By Datamonitor Commentwire | 28 August 2003

Volkswagen has predicted sales of 600,000 Mk5 Golfs in 2004. The new version of the Golf, one of the best selling cars of all time, will be launched in Germany in October. Despite the car's established reputation and popularity, it is entering a market that is more competitive than it has ever been.

Volkswagen has released a statement ahead of the launch of its new Golf, saying that it expects the car to sell 600,000 units in 2004. The new model will be the fifth generation of the Golf. Over 22 million Golfs have been produced by VW since its first incarnation in 1974, making it the second most popular car in the world behind Toyota's Corolla. The Golf is an important cog in the VW machine and its success is crucial for the company.

After a disappointing period for VW over the last few years, as new car markets across Europe have slumped and new models released by Peugeot and Renault have gained a growing share of the overall market, the launch of the Golf Mk5 later this year could not have come at a better time. The Golf is one of the most popular cars across Europe, with all its models from Mk1 to Mk4 performing well and creating a strong brand image for the company. The Golf is VW's best selling model, accounting for 15% of revenues and profits. As such, the new model is expected to perform fairly well.

However, there are some well-established rival vehicles in the German market. Numerous alternatives to the Golf are offered by Peugeot, Renault and Ford, while a slightly upper class version is provided by VW owned Audi.

As a result, the Golf might struggle in its quest to become the leading model in its class. VW expects to sell 135,000 units in 2003 and 600,000 units in 2004, both of which seem fairly optimistic, given the competition.

However, in the Golf, VW has one of the strongest brands in the automotive market, and it is largely for this reason that the car should get a very good head start.

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