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Last Updated: Tuesday, 9 September, 2003, 17:04 GMT 18:04 UK
Golf fights to maintain its dominance

By Jorn Madslien
BBC News Online business reporter at the Frankfurt Motor Show

Europe's biggest car maker, Volkswagen Group, took centre stage at the Frankfurt Motor Show when it launched its latest version of the world's second most popular car, the Golf.

Volkswagen has high hopes for the new model, its fifth since the first Golf was launched three decades ago.

Volkswagen head Bernd Pischetsrieder presents the new Golf GTI
Volkswagen expects to sell 600,000 Golfs next year
Volkswagen expects to sell 600,000 Golfs next year - sales that should help it reclaim its leading role in the market for medium-sized cars, the largest segment in the European car market.

Following the launch, the group's chief executive, Dr Bernd Pischetsrieder, appeared to believe that the Golf was invincible.

"Competitors come, competitors go. The only car to survive is the Golf," he told BBC News Online.

"I have no particular reason to believe that it will be different this time.

"The Golf was always leading the class, not just in terms of volume but in terms of defining what is that class."

Challenger

The question many here in Frankfurt are asking themselves is whether that is still true.

The new Opel Astra is displayed at Frankfurt's International motor show
I think the Astra is going to sell on its own strength
Rick Wagoner
General Motors
As ever, Golf's hegemony is under threat from Opel's new Astra, which trades under the Vauxhall name in the UK.

But Opel is far from content with the notion that the Golf is ahead.

"I think the Astra offers a nice contrast to the Golf, though both are excellent products," Rick Wagoner, president and chief executive of Opel's parent company, General Motors, told BBC News Online.

But when asked whether it will be a Golf-beater, he refused to be drawn.

"I think the Astra is going to sell on its own strength," he said.

"We don't have to make any wild predictions."

New competitors

Such caution may seem suitably prudent given that the market for medium-sized cars is getting increasingly crowded.

Already marred by overcapacity of up to 25% according to some estimates, the segment is having to endure onslaughts by a slew of new models.

The Golf and the Astra's main competitor, Ford, is of course in on the game with its launch of the latest Focus, the C-Max minivan.

This is the car Nick Scheele, president and chief operating officer of Ford Motor Company, likes to describe as a "multi-activity vehicle".

And it does not stop there.

The Ford Motor Company is also behind Volvo's S40 and the Mazda 3.

Both cars will be built on the same platform as the Focus, and about 60% of the components in the cars will be shared.

Then there is the ever sophisticated range of French cars, the high quality Japanese marques, and the German premium brands.

They all want a piece of the action in the European mid-size car market.

Massive market

Consequently, both Volkswagen's role and abilities to set standards across the sector are increasingly being questioned.

Car makers' margins within the segment are being squeezed, making it hard for all of them to make money.

"But that doesn't meant the volume manufacturers will not be around," Ford's Mr Scheele told BBC News Online.

"They are still around and it is by far the largest segment.

"In the medium-sized segment, 70% plus are volume manufacturers.

"That is still an awful lot of market to play for and one in which we plan to be very, very competitive."




WATCH AND LISTEN
Volkswagen Group's Dr Bernd Pischetsrieder
"[Selling] 600,000 new Golfs by next year is not an extremely ambitious objective"



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