Volkswagen Predicts World Car Sales to Fall 20% in 2009

The chairman at Volkswagen, Martin Winterkorn has told a German newspaper that he predicts world car sales will fall by up to 20% this year and that the manufacturing industry will soon be forced to confront painful changes to survive. Winterkorn feels confident in making these observations as he believes that Volkswagen, as Europe’s largest car maker, will survive the crisis better than others, but will still see a fall in sales which could be as high as 10%.

The situation facing vehicle manufacturers all over the world is one of continually falling sales, slowing production, and an inability to even move the stock filling their showrooms. Winterkorn has admitted that the situation for Volkswagen is not ideal either, but that the car maker is not facing the same crippling challenges many of its competitors are battling with.

While the end of 2008 was difficult economically for many businesses, the initial financial troubles have served to show Volkswagen that they are prepared for, and can handle to some degree, the worst. However, being prepared and surviving long term in this state are two very different things and even the Volkswagen chairman admits ‘we cannot go on like this’.

Winterkorn sees the fall in sales continuing into the new year, however was able to confirm Volkswagen’s forecasts for 2008, including an increase in sales and operating profit, without revealing any of these figures. Volkswagen is also not planning to reduce the working hours at any of its factories either.

With such honest and insightful predictions from an industry leader in luxury vehicle manufacturing, it now seems likely that while the initial shock and effect of the financial crisis has eased, it is far from over, with many in high end, luxury industries being the most heavily hit, even if only at varying degrees.