Automakers are once again chasing sky high sales

Everyone, from BMW to Volvo is looking to significantly boost its sales volumes. Smaller manufacturers like Lotus and Jaguar along with startups like Fisker are going for broke with massive expansion plans and even General Motors and Chrysler who are emerging from bankruptcies and intended to eliminate excess capacity are looking to grow global sales by millions of vehicles.

The Volkswagen Group has made its ambition to sell 10 million cars by 2018, one million of them in the United States and even worldwide. Volkswagen Group sales Chief Christian Klingler says, “Of course these are ambitious goals, and we ask ourselves, ‘Is it realistic?’ [but] we believe we are on pace.”

Jim Hall, an analyst says, first there’s a basic truth, “The more you sell, the more you reduce your costs.” If one company stands still while others expand it could soon find it paying more than its competitors for the same tires, steering racks and batteries.

GM recently announced plans to double sales to five million vehicles by 2016. Kevin Wale, president of GM China says “The bigger concern is not growing fast enough.”

>> “If you overreach in one year, then the next you catch up,” he added.

>> Hall further says, “Not everyone’s going to reach their targets, you hit your sales targets when you have one or more of your competitors helping you.”

Surging brands like Hyundai and Subaru have done it the right way but many companies have resorted to incentives and entered too many new segments. In the end, there will be losers as there are obstacles to growth that are impossible to predict.

Toyota released a five year plan that projected a seemingly prudent 7% uptick in its global sales volume by 2015. Three days later a massive earthquake and tsunami in Japan knocked out a sizable portion of the company’s manufacturing capacity.

VW’s Klingler says, “If you’re going to a football match, are you asking yourself if you’re going to lose?”