VW invests for long road ahead Inside Volkswagen's giant factory in its home city of Wolfsburg, northern Germany, the robots are proliferating. About 1,000 have appeared in the past year, a rise of a quarter that illustrates the company's effort to become the world's biggest carmaker this decade. The new robots - mostly Japanese made - are assembling the Golf 7, a vehicle unveiled last October that Europe's biggest automotive company by sales hopes will help maintain its impressive growth momentum of the past few years. The Golf 7 is among the first vehicles VW is building that use a novel assembly system based around extensive component sharing between different types of car. Partly to support this new concept of "modular assembly," VW is investing more than €50bn in new plants and vehicle technologies over the next three years, outpacing most of its main rivals, in pursuit of its goal of taking over by 2018 from its Japanese competitor Toyota as the biggest carmaker by volume. For all the scale of the company's longer-term aspirations, Martin Winterkorn, VW chief executive, was at pains today to damp down expectations for the coming year, pointing to the difficult state of the market for new cars in Europe and also warning of a slowdown in growth in China, the world's biggest car market. "Without doubt the [global sales] environment is definitely a tough challenge - especially for European carmakers," Mr Winterkorn said. Europe - including the company's commercial vehicle divisions making MAN and Scania heavy trucks - accounted for 60 per cent of VW's €192.7bn revenues last year. The market for cars in Europe - where VW has a market share of more than 20 per cent - fell heavily in 2012, with further declines expected this year, prompting carmakers such as PSA Peugeot Citroën and Renault of France to slash capacity and employee numbers. While VW has ridden the storm better than most - increasing its market share slightly in the continent last year - Mr Winterkorn has warned that the company cannot expect to be immune from the sales and profit pressures. Underscoring cautious guidance the company has already given to investors, Mr Winterkorn said the group aimed to deliver a similar operating profit to the €11.5bn achieved in 2012, while boosting sales by an unspecified amount. Hans-Dieter Pötsch, VW finance director, listed various "negative effects" likely to have an impact in the coming year, ranging from extreme weaknesses in the market for selling trucks, to the high level of the euro, which is reducing the cost competitiveness of some of its European factories. However the company did nothing to talk down its overall goals over the rest of this decade, pointing in particular to heavy planned investments in China. VW - along with two big Chinese carmakers that are its joint venture partners - is putting almost €10bn into plant investments and research and development in China in the next few years, with this cash counted separately from the overall €50bn five-year spending plan. The outlays in China include seven new plants on top of the 12 it has currently. Overall Mr Winterkorn intends VW and its partners to be in a position to build 4m vehicles a year in the country by 2018, almost double the existing level. Much of VW's ambitions are based around its ideas in modular assembly, which the company hopes will cut manufacturing costs of specific types of car by up to a fifth. According to estimates by Stuart Pearson, an analyst at Morgan Stanley, as a result of this strategy VW will by 2019 be able to produce an average of more than five models per common platform and assorted "kits" of parts, more than other large carmakers. The comparable numbers for models per platform for Toyota and the US's General Motors will, for instance, be less than 3.5, according to Mr Pearson. On Mr Pearson's estimates, VW may therefore be in a position to overtake Toyota as the biggest carmaker by volume as early as 2015, pushing up the 9.2m cars it made last year by a few hundred thousand extra vehicles, while at the same time increasing the average profit it makes per car. But for all the upbeat tone of the company's longer-term thinking, VW shares - which tripled in value in the three years from the beginning of 2009 - fell slightly in early trading today, continuing their softening in recent weeks. The share price fall underlines investor concerns that - notwithstanding the grand talk by VW of its new production concepts - it still has to show it can navigate what might prove to be distinctly choppy waters in Europe in the next couple of years.