Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

This General Motors Company (GM) Rival Is Upping Its Game

Who’s the biggest automaker in the world?

For a long time, there were only two possible answers to that question: Detroit giant General Motors Company (NYSE:GM), which held the crown for years (and stole it back in 2011), and Japanese colossus Toyota Motor Corporation (ADR) (NYSE:TM), which came on strong last decade and won the title again last year.

General Motors Company (NYSE:GM)

But now there’s a third entrant in the race to become king of autos. And last week, this automaker gave another big indication that it’s pushing hard to up its game.

VW’s push for global domination
That automaker is Volkswagen. VW has made no secret of its ambition to become the No. 1 selling global automaker by 2018.

In an interview last week, VW works council chief Bernd Osterloh told German newspaper Handelsblatt that the automaker is planning to boost its global headcount by 9%, from 550,000 to 600,000, by 2018. It’s part of VW’s ambitious plan to overtake both General Motors and Toyota in overall global sales.

Needless to say, most of those new hires won’t be in VW’s home base of Europe. VW is the European market sales leader, but Europe isn’t where the growth is – in fact, protracted economic slumps in many European nations have hammered auto sales in the last couple of years.

Europe’s economic weakness is a big part of why VW is pushing so aggressively to expand overseas. Like rival General Motors Company (NYSE:GM), VW has a huge, well-established presence in China. General Motors Company (NYSE:GM) has been the China market leader for nine years now, but VW’s total 2012 sales in China were close behind the General’s.

Poised for expansion in China and the U.S.
Like Ford , which has been investing heavily to expand its presence in China, VW is expected to make a significant expansion push in the Middle Kingdom over the next few years. VW executives have said that they expect to nearly double the German automaker’s production capacity in China between now and 2018.

VW also sees the U.S. as a significant growth opportunity. So far in 2013, the VW brand has just a 2.7% share of the U.S. market, with VW’s luxury Audi brand adding another 0.9%. Audi in particular may have room to grow: The brand is the luxury-car market leader in China, but trails its big German rivals – along with Toyota Motor Corporation (ADR) (NYSE:TM)’s Lexus and General Motors Company (NYSE:GM)’s Cadillac – here in the U.S.

VW already leads Toyota and GM in profits
In one way, though, VW is already the global automotive leader, thanks to its efficient engineering approach and its very profitable Audi brand. VW was the most profitable automaker in the world in 2012, with $15 billion in pre-tax profit. Toyota’s $11.1 billion operating profit and General Motors Company (NYSE:GM)’s $7.9 billion pre-tax total were a long way behind.

But VW and its shareholders want more. Will the German giant really leave General Motors Company (NYSE:GM) and Toyota Motor Corporation (ADR) (NYSE:TM) behind? Stay tuned.

The article This GM Rival Is Upping Its Game originally appeared on and is written by John Rosevear.

Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.