Last Update: 5:07 PM ET Oct 3, 2006


(Updates with further context on Volkswagen's Olympic Program in China, and comments from Management Board Member Sanz on the company's strategy in Brazil and Argentina.)
BUENOS AIRES (MarketWatch) -- Volkswagen AG (VOW.XE) Management Board Member Francisco Sanz said Tuesday that the German auto maker aims to regain leadership in the Chinese automotive sales market by 2008 after losing its No. 1 spot to General Motors Corp. (GM) earlier this year.
Volkswagen, which had been the longtime leader in China until 2006, has seen its share of the global passenger car market slide in recent years due to a surge by big international competitors based in Asia. In China, Volkswagen sales rose in the first half of 2006, but the German auto maker's growth rate of about 30% during the period was outpaced by a nearly 50% increase at GM.
Sanz, speaking to Dow Jones Newswires on the sidelines of the International Iron and Steel Institute annual meeting, said the company has plans to wrestle sales leadership away from GM by 2008. The China leadership goal is part of an Olympic restructuring program that has been designed to reinvigorate its business in one of the world's most promising and challenging markets.
Sanz leads Volkswagen's procurement efforts and is part of the company's six-member management board.
"Clearly we still want to be No. 1," he said, regarding the company's desire to once again lead in China. "We have to do what everybody does in the business - which is cut costs, make more attractive models and improve quality."
GM and its joint ventures sold 453,832 vehicles in the China market between January and June, up 47% from first-half 2005, according to the Xinhua News Agency. GM entered the Chinese market in 1999, and has surged to the top of the pack there thanks to an aggressive acquisition, production-expansion and vehicle-launch strategy.
Sales at Volkswagen totaled 345,375 vehicles during the period.
Volkswagen's China plan, called the Olympic Program because it is meant to end in 2008 when China hosts the Olympic Games, relies on the close cooperation of VW's Chinese partners in purchasing efforts and other initiatives. It also calls for the release of as many as 12 new models for the country.
VW Doesn't Rule Out Increasing Production In Argentina
Speaking of the company's plans in South America, Sanz said Volkswagen doesn't plan to shift production from Brazil to Argentina.
The German auto maker is in the process of reducing its production in Brazil aimed for the export market and trimming 6,000 jobs by 2008 in an effort to increase profitability, which is being depressed by the Brazilian currency appreciation against the U.S dollar.
However, he didn't rule out a possible production increase at Volkswagen's Argentine plant.
"We just invested in the local production of a new sedan (in Argentina)," he said.
Argentina is enjoying a fourth year in a row of strong economic recovery and the peso's devaluation against the U.S. dollar is boosting the auto sector's production.
Other auto makers have been launching or are preparing more investment in Argentina. GM has recently announced a 40% increase of its production in its plant in Rosario, while Fiat SpA (FIA) is expected to unveil its plan to reopen its plant in Cordoba to jointly produce pickup trucks and SUVs with India's Tata Motors (TTM).
http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=google&guid=%7BF8B54E49-BF45-47EB-BB75-EC11CABDA202%7D&keyword=

GM are not going to let VW take the leadership so easily, you will see more models from both marques and possibly more discounting.

Beijing, January 31, 2007 ¨Volkswagen Group China (VGC) was awarded as "Most Responsible Corporation" in the Chinese automotive industry. Dr. Suixin Zhang, Executive Vice President of VGC and Chief Representative of Volkswagen Beijing Office, accepted the price end of January in the Great Hall of the People in Beijing. The award was jointly presented by China Newsweek and the Chinese Red Cross Foundation. It was supervised by the Red Cross Society of China, Overseas Chinese Affairs Office of the State Council, the Ministry of Commerce and the State Administration of Work Safety. Volkswagen Group China was the only awarded corporation of the automotive industry.

The "2006 Most Responsible Corporation" award is one of the most trusted measurements of social responsibility among Chinese corporations.

"Since starting business in China more than twenty years ago, Volkswagen has been working with its Chinese partners to not only provide excellent cars to its customers but to also fulfill its corporate social responsibilities, making large contributions to China's sustainable development," Dr. Zhang said in a statement. "It is a great honor to be granted this renowned award," he added.

Volkswagen in China actively supports music, sports and art events, as well as road safety projects, education and environmental protection. Volkswagen is also partner of the 2008 Beijing Olympic Games. A recent public poll, jointly issued by the China Association of Automobile Manufacturers and the National Bureau of Statistics of China, rated both Shanghai Volkswagen and FAW-Volkswagen as Most Reliable Automobile Manufacturer.

More than 700,000 vehicles sold to customers in China

Clear number 1 position with 711,298 passenger cars sold

Beijing, January 9, 2007 - Volkswagen Group China (VGC), with its two joint ventures Shanghai Volkswagen and FAW-Volkswagen achieved a historical sales record with 711,298 vehicles sold in China Mainland and Hong Kong in 2006, up 24.3% (2005: 572,362). Sales of the Volkswagen brand group amounted to 628,807 (2005: 512,219, up 22.8%) including 6,021 imported vehicles. Audi delivered 81,708 vehicles to customers (2005: 58,878, up 38.8%) including 4,486 imported units. These results not only indicate the best sales record achieved by Volkswagen in China so far, but also conclusively prove the leading position of Volkswagen in the Chinese auto industry. The Volkswagen Group along with Shanghai Volkswagen and FAW-Volkswagen remains the biggest manufacturer in the Chinese passenger car market. The Hong Kong market, which was included in Volkswagen's China Sales operation in 2006, also achieved great results, selling over 1,906 cars (Volkswagen: 1,006, Audi: 900), a 28.3% increase over the previous year.

"Competition in the industry has undoubtedly become much fiercer in 2006; however, we have exceeded our internal sales targets for 2006 by far and have met the goal we set for ourselves of stabilizing our market share due to our efforts to bring our company towards full customer orientation. We are also delighted to have achieved a positive financial result in 2006," Dr. Winfried Vahland, CEO and President of Volkswagen Group China, said. The achievement was largely assisted by Volkswagen's seamless joint effort with the Group's two joint ventures, Shanghai Volkswagen and FAW-Volkswagen. Together with its two joint ventures, Volkswagen has successfully reached all its major targets for 2006, including the restructuring and repositioning of the dealer networks, the differentiation of the two joint ventures, further cost control, as well as the launches of new market-oriented models, such as the Passat Lingyu, Polo Jinqing and Jingqu, Sagitar and New Bora, Audi A6L and new Audi A4.

Looking ahead, 2007 will see the Volkswagen Group China accelerate the Olympic Program. One of the targets set is to realize new record sales for 2007 through the launch of more market-oriented products and the introduction of the most advanced technology to further secure their leading position in the auto market. Shanghai Volkswagen will launch the Skoda

Octavia and FAW-Volkswagen will follow with its new flagship model Magotan. The new TFSI engine, a completely new engine series, representing the latest generation of fuel saving and low emission powertrain technology will be available both for the Volkswagen Magotan and the Skoda Octavia. The Volkswagen Polo Jinqing and Jinqu have already been equipped with another new and fuel efficient engine generation since their launch in June 2006. Volkswagen Group China will also continue its program to optimize the production process in terms of product costs, through further increasing the local content rate in order to offer our customers attractive car models of the highest quality standards.

Dr. Vahland commented, "Volkswagen has grown and will continue to grow in China. The year 2006 was the period to achieve the turnaround. We are back on track now. In 2007 we will focus on securing the quality of the business processes, on sustainable development and an improved sales structure. Compared to 2006 we expect to increase our sales volume and profitability again. There are many challenges ahead and there is much work to be done. Nonetheless, we are confident that we will meet these challenges thanks to the strong collaboration we have with our local partners, our institutional knowledge and ability to adapt and thrive with change."

Environmentally friendly powertrain strategy presented at inauguration of new engine plant in Dalian

Dalian/Beijing, 30 March 2007 - Volkswagen announced new environmental goals for China at the inauguration of the engine plant in Dalian. These goals envisage a reduction of over 20 percent in fuel consumption and emissions for models built at the plants operated by the two joint ventures FAW-Volkswagen and Shanghai Volkswagen by 2010. Volkswagen intends to become the most environmentally friendly automaker in China with the help of modern TFSI engines, innovative automatic gearboxes, lightweight design and further initiatives. So far, some 80 million euros has been invested in the new engine plant, and total investment until 2011 amounts to roughly 145 million euros. The plant is designed for an annual production capacity of 300,000 engines.


Environmental protection was the central theme at today’s opening ceremony of the Volkswagen engine plant in China. As Dr. Winfried Vahland, President and CEO of Volkswagen Group China, emphasized: "As the market leader in China we have an obligation to ensure that growth is compatible with the environment while also keeping ahead of government regulations."


Volkswagen intends to cut fuel consumption and emissions in China by more than 20 percent by 2010 through the introduction of the innovative TFSI engine technology and a new generation of automatic gearboxes as well as lightweight design for individual vehicle components. In addition, the company is currently arranging for the certification of all production sites in China to the ISO 14001 environmental management standard.


Shanghai Volkswagen and FAW-Volkswagen have already been complying with the standard for several years, the FAW-Volkswagen powertrain components plant was certified in February. The company has undertaken to recognize the ISO 14001 environmental management standard and plans to complete certification of all productions plants in China by the end of 2007.

http://www.volkswagen-media-services.com/medias_publish/ms/content/en/pressemitteilungen/2007/06/08/25_years_of_volkswagen.-bin.acq/qual-Article.Single.Image0Popup/PopUp330_219popupDB2007AL01007_Unterzeichnung%20ve rtrag.jpg

The signing of a trial assembly contract on June 8, 1982 marked the beginning of the Volkswagen Group’s involvement in China.

Wolfsburg, 08 June 2007 - 25 years ago today, Volkswagen began gradually establishing production facilities in the Far East’s most important market of the future. With over 700,000 vehicles produced, the joint ventures Volkswagen Shanghai and FAW-Volkswagen established under these plans secure the Volkswagen Group’s market leadership in China.

Corporate policy at Volkswagenwerk AG in the 1980s concentrated on the development of new sales markets. While exports to the industrialized nations of Western Europe stagnated, new opportunities were opening up in Asia. The People’s Republic of China in particular, with its vast resources, its low level of motorization and its nascent automotive industry, offered excellent options for the future. The government in Peking set the framework for possible cooperation under China’s planned economy, backing joint ventures with the Western investor with a view to benefiting from the engineering know-how and the financial strength of the Wolfsburg-based automaker. The trial assembly contract laid the foundation for the German-Sino success story, and the establishment of "Shanghai Volkswagen Automotive Company, Ltd." (SVW) on February 16, 1985 marked the first milestone. As early as September 1, 1985, the Santana, the first Volkswagen model to be assembled in China, was already leaving the assembly line, and the enormous success of the vehicle spurred the development of the plant and the company.

The first phase of establishing a modern production facility in Shanghai was concluded in 1991. Given the large number of components for the Santana produced locally, the vehicle was no longer classed as an import, but considered a Volkswagen "made in China". Consequently, import restrictions on sales of this volume model no longer applied and deliveries quickly soared. Volkswagen reinforced the subsequent market leadership on February 6, 1991 by setting up a further joint venture. "FAW-Volkswagen Automotive Company, Ltd." (FAW) located in Changchun was a new factory with an initial annual production capacity of 150,000 vehicles, and production of the Jetta commenced in Changchun at the end of 1993. Rising sales were the reward for the far-sighted investment policy pursued by Europe’s largest automaker: while only 33,851 vehicles were sold in China in 1990, deliveries had increased tenfold by the year 2000.

New production capacity was built up in China to keep pace with the ongoing boom in the automotive sector on Asia’s strongest growth market. By 2003, the three production plants of Shanghai Volkswagen and the two FAW factories in Changchun had expanded sales to just under 700,000 units. Further joint ventures to produce engines in Shanghai and Dalian, gearboxes in Shanghai and vehicle components in Changchun closed the capacity gap by 2004 and raised the local content of the eleven models now produced in China. Over the last three years, Volkswagen has faced the challenge presented by the growing number of foreign automakers pushing into the Chinese market. The Volkswagen Group responded to competitive pressure by introducing attractive new models. Support for the local supplier industry and stronger integration of the Chinese joint ventures in the VW procurement alliance generated positive synergy effects, thus also realizing cost benefits.

By laying these foundations, Volkswagen reinforced its position, selling 711,186 vehicles last year. Developments show that China, as the second most important market after Germany, already plays a significant role in the future of the multiple-brand automaker from Wolfsburg.

Congrats VW! :cool:

VW ventures lead gain in car sales
By Jin Jing 2007-7-7


FAW Volkswagen, Shanghai Volkswagen and Shanghai General Motors Corp led gains in a 22 percent sales rise for Chinese mainland's passenger car sales in the first half of this year.

Chinese car makers boosted sales of passenger cars, including cars, sport-utility vehicles and multipurpose vehicles, to a total of 3.08 million units by the end of June, according to China Association of Automobile Manufacturers yesterday.

The year-on-year growth is falling off, compared with 36.5 percent for the first half of last year and 30 percent for the whole of 2006.

"Moderate growth reflects that the market is maturing after two years of increase," said Rao Da, general secretary of the union of National Passenger Car Market Information.

"Even so, China still managed to be the driving force for global car sales, with relative high growth level compared with other markets."

Passenger car sales rose by 29 percent in June, the second fastest increase after January this year.

In the past six months, car sales expanded 26 percent to 2.28 million units. Sales of multipurpose vehicles topped 107,000 units during the same period, while SUV sales hit 158,000 units.

More than 15 models hit the Chinese mainland market from January to June, while at least seven car makers offered price cuts to boost sales, including Chery Automobile Co and Honda Motor Co.

Two joint ventures of Volkswagen AG beat General Motors Corp to take the top two sales spots.

FAW Volkswagen Automobile Co, Volkswagen's venture with FAW Group Corp, had 9.56 percent of the car market, compared with Shanghai GM's 8.82 percent, the association said.

The top 10 car sellers, including Chery, Dongfeng Nissan, and Guangzhou Honda, sold a combined 1.46 million vehicles, accounting for 64 percent of the total car market.

Shanghai Daily

"Volkswagen AG cut prices on a flagship model at its Shanghai venture by up to 7 percent, effective on Monday, to help push sales in China’s fiercely contested market.

Shanghai Volkswagen, the auto maker’s car manufacturing venture with Shanghai Automotive Co. (600104.SS), has reduced prices for its Passat Lingyu -- rolled out in November 2005 -- by as much as 16,200 yuan ($2,143), the venture said over the weekend.

Although China’s auto market is growing strongly, car makers have been cutting prices, especially on older models, to attract buyers. In March, the top European auto maker lowered the price of several locally made cars by up to 11 percent, including Santana and Polo models.

Rival General Motors (GM.N) in January cut prices by as much as 10 percent on its Chevrolet Lova and Aveo economy cars. In the first half of the year, Volkswagen sold a record 431,369 vehicles in mainland China and Hong Kong, up 24.6 percent from a year earlier.

For the full year, the top European automaker, which also operates a car manufacturing venture with leading Chinese auto maker FAW Group, aims to increase its sales by roughly one-fifth and maintain its 17 percent share of the world’s second-largest auto market, a senior company executive told Reuters in April."

- China Daily -

Volkswagen sales are growing at amazing rate...

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"German automaker Volkswagen plans to sell 900,000 vehicles in China this year, spurred by a 30-percent rise in sales in the first nine months. The sales target exceeds the previous goal of 800,000 vehicles in the auto giant's fastest growing market in the world.

Sales from January to September surged 30.2 percent from the same period last year to a record 684,786 vehicles in China, 13,000 of which were imported. The Audi, Volkswagen's luxury brand, saw sales soar 25.7 percent to 76,168, including 6,504 that were imported.

China had become Volkswagen's largest overseas market, with its profits on the rise since the beginning of the year, said Winfried Vahland, chief executive officer of Volkswagen China. Last year, Volkswagen and its two joint ventures in Shanghai and eastern Jilin province sold 711,000 vehicles in China, up 24.3percent from a year earlier"

- Chinaview.cn -

And the freaken German's have a problem with Chinese made cars on sale in Germany???

Volkswagen sold 910,000 vehicles in China.

January 11, 2008 – Volkswagen has sold 910,491 vehicles in Chinese market in 2007, up 28 percent from the previous year’s 700,000, Volkswagen China announced yesterday.

In 2007, Volkswagen sold 780,784 units of VW-badge vehicles, including 9,067 imported VW vehicles, up 24 percent from one year earlier. Volkswagen also sold 101,996 units of Audi-badge vehicles, which includes 8,828 imported units, up 25 percent from one year earlier.

FAW-VW sold 459,359 vehicles in 2007, of which Jetta alone accounts for 43.49 percent of the total volume. Despite the rising sales, Jetta and Audi were also the main contributors to FAW-VW's profit gains.

Shanghai VW comes as the third biggest seller in Chinese market, which sold 436,343 vehicles in 2007. Four models, Passat, Santana, Santana 3000, Polo represent 91.07 percent of its total sales.

"VW is confident to sell one million vehicles in 2008,” said Dr. Winfried Vahland, President and CEO of Volkswagen China.

source: Gasgoo.com

China becomes Volkswagen's biggest market worldwide.

January 16, 2008 - German auto giant Volkswagen announced recently its sales in China mainland hit a record high of 910,491 vehicles in 2007, up 28 percent from 2006, Xinhua News Agency reported.

Volkwagen's sales in China (including Hong Kong and Macau) has exceed its sales in home market, which means China has become the largest market for Volkswagen worldwide, the report said.

VW China president Winfried Vahland said VW aims to sell one million vehicles in China in 2008. Currently, the German automaker holds 18 percent of Chinese passenger market.

Winfried Vahland also promised the Chinese government that all the major models produced by its two joint ventures, Shanghai VW and FAW-VW, will reduce fuel consumptions and tailpipe emissions by at least 20 percent by the end of 2010.

Globally Volkswagen's unit sales for 2007 rose 7.9 pct year-on-year to 6.189 million. In Germany, it sold 1.06 mln vehicles, down 4.8 pct year-on-year.
source: Gasgoo.com

Volkswagen profit in China rose 172% in 2007!

March 17, 2008 - The world's fourth-largest carmaker Volkswagen said that its annual profit reached 294 million euros ($458 million) in China last year, up 172.22 percent compared with 108 million euros achieved one year earlier.

"We will continue to expand our product line and launch more models that can meet varying demands from different markets," said Martin Winterkorn, CEO of VW.

Volkswagen, through its joint venture with FAW and SAIC, sold a total of 920,489 vehicles in the Chinese market in 2007, up 33 percent from the previous year.

source: Gasgoo.com

VW brings four new models to Beijing auto show.

Volkswagen will bring four new-brand vehicle models, including two independent vehicle models to this Beijing auto show in late April, a convertible coupe and a SUV model.

Convertible Coupe EOS:
http://www.gasgoo.com/resource/editor/%E6%95%9E%E7%AF%B7%E8%B7%91%E8%BD%A6EOS2.jpg

The first is Convertible Coupe EOS by Volkswagen. 4.41 meters long, 1.79 meters wide and 1.44 meters high, EOS is a mix of PassatB6 and Golf, while close to Cooper Convertible. But in touring performance, EOS, which is hard-top designed, is superior to Cooper Convertible both in sound insulation and body strength. In addition, the cover can be opened within 25 seconds by pressing the key on the central control console. Then a broad vision of sky comes to the four passengers.

To match hard-top cover of EOS, Volkswagen has designed a complete safety system for this model, including strong automobile body construction, standard double front seat SRS as well as specially-designed side aerocyst for forehead protection in emergency. Volkswagen noted that security measures of Convertible EOS will come into effect in 0.25 second when sensing an accident. Besides, the ESP dynamic stable system and the xenon head lamp are all standard equipment to provide the best safety.


SUV Tiguan:
http://www.gasgoo.com/resource/editor/%E9%80%94%E6%AC%A22.jpg

The Tiguan, named "Tuhuan" in Chinese (which means "Happy Journey"), aims to be an urban SUV, and caters to high-income customers between 25 and 40 years old. Tiguan is expected to go on the market as imported complete cars between May and August with a selling price at between RMB300,000 ($42,800) and RMB400,000, while the home-made vehicle model will be launched at the end of 2008 or early 2009, priced at between RMB250,000 and RMB350,000.


Volkswagen also brings two independent brands from FAW and SAIC.

MODEL X

Originating from the Volkswagen PQ34 platform, MODEL X is priced lower than Bora in the present market. MODEL X will possibly continue PASSAT's success. PASSAT leads the vehicle models, with its prototype Superb, while Shanghai Volkswagen has merely modified the front face. And MODEL X will probably follow this way due to the high research expense and long period of time. MODEL X will also be displayed at the auto show.

LAVIDA

Lavida of Shanghai Volkswagen, also called MODEL Y at first, is a sedan for home and commercial use. Shanghai Volkswagen Lavida is expected to be displayed at this month's Beijing auto show.

Lavida is called "mini-Phaeton" for its similarity with Volkswagen's top brand Phaeton in the front face. In fact, as U-shape big-mouth grill of Volkswagen family is widely seen, the front face like Phaeton seemed more classic and graceful. Shanghai Volkswagen said Lavida is the A-level vehicle for Shanghai Volkswagen's next generation, and is also a new-brand model launched to meet Chinese consumers'needs as part of German Volkswagen's global product strategy. Based on the German Volkswagen's global design strategy, Shanghai Volkswagen's R&D team combined world's automobile fashion designs with Chinese consumers' esthetic sense in this model's design. It can be said that Lavida is a model of high quality and will become a top vehicle in the A-level market.

Volkswagen delivers 5,000 Olympics autos to Beijing.

July 18, 2008 - As 2008 Beijing Olympic Games automobile partners, the Volkswagen Group (China) and Shanghai Volkswagen Co., Ltd., FAW-VW Automobile Co., Ltd. jointly announced on July 16 in Beijing that 5,000 official Olympic vehicles have been delivered to the Beijing Olympic Organizing Committee.

The 5,000 official Olympic vehicles are all carry the unique Olympics car sticker that has been especially designed for the Beijing 2008 Olympic Games.

Plans for the official Olympic vehicle were launched in January 2007. In order to ensure efficient and secure vehicles, Volkswagen has implemented rigorous monitoring and service standards in every aspect of production, logistics and transfer; and has tested every vehicle.

http://news.chinacars.com/kuaixun/kuaixun/367138.shtml


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VW China may stop making Santana, Jetta by 2010.

July 31, 2008 - Volkswagen AG may replace the current generation Santana and Jetta with new car models by the end of this decade, a senior official from Volkswagen's China operations said recently.

Dr. Zhang Suixin, Managing Director of Volkswagen (China) Investment Co told the Beijing-based Jinghua newspaper in an interview that the automaker had delayed its plan to give up the two models repeatedly because there's still huge demand for them in the Chinese market.

Santana built by Shanghai VW, and the Jetta model produced by FAW VW remain the two best-selling cars in China in the first half, with sales of 122,147 and 109,547 respectively.

Volkswagen plans to raise its production capacity in China through productivity improvement. The automaker opened a new factory in Nanjing in April with a capacity of 60,000 vehicles a year. Its total China capacity is 1.11 million currently.

source: Gasgoo.com

FRANKFURT, Sept 23 (Reuters) - Volkswagen VOWG.DE commercial vehicles head Stephan Schaller:

* Says to raise prices in Europe due to raw material costs, timing unclear

* Says aims to sell more units in 2009, difficult to give specific forecast

* Says seeking partner to enter Chinese market

* Says discussing purchasing synergies with Scania SCVb.ST sees industrial logic to cooperating with MAN MANG.DE too

((Frankfurt Newsroom; +49 69 7565 1272))

Source: Reuters

Yes, I want to see a Crafter or T5 bus from China! :thumb:

VW to make 10 new car models in China by 2010.

February 27, 2009 - from Gasgoo.com

As part of its newly issued 10-year China market strategy, Volkswagen AG said its two Chinese ventures Shanghai VW and FAW VW will produce at least 10 new models in the 2009-2010 period, and will launch four models each year by 2018, xinhuanet.com reported today.

By the end of 2010, FAW VW will launch four all-new models including the 6th-generation Golf model and Magotan 1.4TSI model, and its long-awaited Audi Q5 will come to the market by November this year.

Meanwhile, Shanghai VW will release its new Passat, Tiguan SUV and VW NMS (Volkswagen New Midsize Sedan). As the youngest Volkswagen brand in China, Skoda will have its Superb and new Octavia models made in Shanghai VW and put to market by 2010.

The power-train strategy driven by Volkswagen's world-leading TSI and DSG technologies will also be applied to the new models made in FAW VW and Shanghai VW, aiming to cut the fuel consumption of all China-made VW cars by at least 20%.

German auto giant Volkswagen AG announced in Beijing yesterday that it has planned to double its annual vehicle sales in China to 2 million units by 2018 and also to double its Chinese dealerships to 2,000 in the same period.

Volkswagen has 19% market share in China now, compared to 12% for GM and 7% for Toyota. Volkswagen and Toyota have bigger potential in the Chinese market than other global carmakers, experts said.

SHANGHAI -- German automaker Volkswagen AG said Thursday that it is launching a new strategy for the China market, aiming to double its sales by upgrading its brand image and improving customer service.
"We plan to add or renew at least four models per year and double the number of dealerships to achieve our sales target," Winfried Vahland, the Wolfsburg, Germany-based company's president for China, said in a statement issued Thursday.
While most world automakers have reported sales falling amid the global economic slump, Volkswagen reported a new record of 6.23 million vehicles sold in 2008, up 0.6 percent from the year before.
Sales in China rose 12.5 percent to 1.02 million in 2008, compared with 1.06 million in Germany, Volkswagen's biggest market. Last year, the company said held a market share of 18 percent in China, including Hong Kong.
Volkswagen entered China in the mid-1980s, before its biggest competitors, and long dominated the market with its Santana and Audi models. It once claimed a market share of over 50 percent, but in recent years has ceded ground to an onslaught of competition from international and domestic rivals.
The company has two joint ventures in China -- one with the state-owned China FAW Group, or FAW-Volkswagen Automobile Co., and one with SAIC Motor Corp., Shanghai Volkswagen Automotive Co.

VW China sales exceed home market

For the first time ever, Volkswagen Group sold more cars in China than it did in its home market of Germany. During the first half of 2009, Volkswagen sold 652,000 cars in China, while it sold 631,900 vehicles in Germany during the same period. Both figures represented an increase in demand for the automaker’s portfolio.

VW saw a 22.7 percent increase over the same period in 2008 in China, while its sales increased 18.3 percent in Germany.

For comparison, Volkswagen saw a 5 percent dip in global demand, mostly dragged down by sluggish new car demand in North America and in much of Europe. The automaker sold 221,900 cars in North America and 1,662,900 cars in all of Europe.

The figures include the entire lineup of Volkswagen Group products, including VW, Audi, Skoda, Seat, Bentley, Bugatti and Lamborghini.

http://www.leftlanenews.com/vw-china-sales-exceed-home-market.html

Volkswagen: Everything is ready
Source: Diego’s Blog (http://www.gochinaauto.com/modules/wordpress/) in gochinaauto

http://www.gochinaauto.com/uploads/photos/5017.jpg

Everything seems in right way for Volkswagen these years. The German automaker is aiming at not only the crown of the world auto industry. If Volkswagen wants to stay as long as GM in this place, it has to learn something more.
Volkswagen is biggest winner in recent crisis of auto industry. Three years later after Volkswagen set Toyota as its goal, it nearly made it today!

China Auto Market: Where can not lose
For Volkswagen China market is key of the key. China’s huge auto market will determine which one to rank the first from Volkswagen or Toyota. Volkswagen China’s president even published a “2018 strategy” this April in order to make sales of Volkswagen cars doubled in China.

Actually Volkswagen did not follow this 2018 strategy. It was even faster in China! In the crisis Volkswagen accelerated its steps and eventually its market share increased on a big base. Similar with Toyota, Volkswagen aims at China’s second-tier cities for the next round growth. For this goal Volkswagen will increase its dealership from 1040 to 2000 and most of the new dealerships will come from the West and South area. Actually North is not only the base for Volkswagen but also its biggest market. In South China Japanese automakers such as Toyota, Nissan and Honda dominated the richest area of China. In order to win strategic advantages for the coming ten years, Volkswagen has to choice but develop itself in South.
Expanding the sales network is just the first step for Volkswagen. Recently Volkswagen said it is going to invest 4 billion Euro more in China for expanding it production for increasing domestic demand for Volkswagen products. In the statement by Volkswagen China, the Germen automaker said its current production capacity can not fulfill the requirement from Chinese customers. “Our business will make a two digital increase and maintain the leadership in China in the future. In order to make it happen, we need to increase Volkswagen’s production capacity to 2 million a year before 2018.”
Information said that according to Volkswagen’s new investing plan, 1.3 billion Euro will be invested in plants in Nanjing and Chengdu for three models including Jetta. Besides, Volkswagen will build more plants in Changchun and Shanghai.All the investment will be paid by Volkswagen’s joint ventures in Shanghai and Changchun.
Expanding in network and production needs more good products. For this task Volkswagen has 1.4TSI Sagitar DSG Magoton, Golf 6 and Skoda Superb. For TSI+DSG people will take them as best partners and the market performance expected to be also best.
On the other hand Volkswagen also has great hope to Golf 6. No one will doubt the attraction of Golf 6 which presents the essence of Volkswagen’s 30 year history. In China some media said due to the failure of last generation, Golf 6 has to learn how to be successful in compact car segment in China, afterall this is the hardest market there.Mr. Hu, the new vice-president of FAW- Volkswagen obviously wants more from Golf 6. Hu said “We hope Golf 6 can make a really new impression to Chinese customers and make a new impression about the joint venture for Chinese young”
Distribution, production and products are all not bad. For Volkswagen the coming ten years will be a great chance, at least in China.

Asia-Pacific auto market: the next goal
Except China, Volkswagen also has ambition to Asia-Pacific auto market which is the traditional market for Toyota.
The first goal is United States. Volkswagen chose a best time to enter US market. When Detroit three are all struggling for survive the German invader started its expansion in North America. When Toyota facing the demand declining problem in US, Volkswagen made a decision to build new plants in Tennessee. Right decisions were made in right time in US market. “The Tennessee plant can produce 150,000 units for North America market and it is now an important part of Volkswagen global.” New CEO Martin Winterkorn said and “We are now in US market and Volkswagen is going to be one of the most active power here”
Volkswagen made statement that the Tennessee plant is going to SOP early 2011. Before 2018 the plant can reach a 300,000 units production for various models.
It was said that Volkswagen is going to launch a model just for North America auto market firstly and then a fuel efficiency city SUV. Volkswagen hired nearly 2,000 workers locally and its suppliers and logistics department will hire more.“This plant is a milestone for Volkswagen in North America.” Marin Winterkorn, the new CEO of Volkswagen told reporter “In 2018 Volkswagen will sell more than 800,000 units Volkswagen cars in America and the number by Volkswagen here is just 400,000”US is not the only target by Volkswagen. Information from Reuters said that Volkswagen is making negotiation with a Malaysia local dealer Protonholdings for locally produce Volkswagen cars there. “This is the first step by Volkswagen to expand business in southeast Asia market”A spokesman from Volkswagen said “In long run the investment in Southeast Asia can not meet the local demand and we have to locally produce our products”From a report by Malaysia local newspaper, Volkswagen won’t invest in Proton. Two years before Volkswagen tries to build a ally with Proton but the negotiation failed in 2007. Volkswagen think Southeast has great potential and it is true. Population of this area is 570 million and the car ownership is close to zero compared with West.

But Southeast market is not as easy as it looks like. Each country has its own situation there and the tariff for vehicles is 100%. The only way to develop locally is to produce plants there.
Anyhow Volkswagen made a first step.

Capital operation

Volkswagen can not only focus on increasing production, it has to find way to via capital market. For any company reconstruction of capital is a good method under such a situation in order to top its competitors.First goal is commercial vehicles maker. Volkswagen’s BOD Chairman Bernd Pischetsrieder’s comments in Frankford auto show ever provoked wide debates. When asked to make some comments to the rumor of taking over MAN the big boss said “It’s a hard way and only the brave can go faster” and suggested that “A dozen is more than ten”
During which some reports said that Bernd Pischetsrieder is did not say he is going to build a truck ally nor buying MAN’s share. Bernd’s idea is to share R&D cost and procurement among all truck makers by independent brand within the ally to win Synergy effect.
Some comments after the statement that if VW take over MAN the new truck makers is going to top Daimler and Volvo in Europe to be the No.1.If this comes true, Volkswagen will really has a dozen by Scania, Audi, Bugatti, Bentley, Lamborghini, Skoda, Seat, Porsche etc. If count MAN in, there is only one needed for a dozen. Someone said SUZUKI is going to be the last one in one dozen.
Unlike Toyota SUZUKI is very active in international cooperation for development due to its needs for technology and capital. For Volkswagen all SUZUKI need is what it can offer. Besides this, Volkswagen and SUZUKI can cooperate in many fields.In Asia, China and India are the biggest auto markets. Volkswagen nearly can do nothing to get some mini car market share in these two countries. SUZUKI is the one. The Japanese micro van maker is regarded as the King in this field and only in India SUZUKI shares over 50% of tatal micro car segment.

Actually market share is not the only reason Volkswagen for SUZUKI. Micro car is what Volkswagen has to do strategically. Two fields are Volkswagen are accelerating within. One is new energy vehicle and another is micro cars. Both the two business are the whole industry’s direction. Volkswagen can not make cheap micro cars as Japanese auto makers according to its production standards and the only way is to take over a specialist in this field. SUZUKI is one of its best choices.Everything is ready. Volkswagen’s map for the future is nearly perfect. But the German automaker can not forget its old Friend Toyota. The Japanese auto giant is emphasizing to go back to origin (Customers’ need) recently. Can this give some hints to Volkswagen? After all Toyota did everything Volkswagen is going to do.

Original source:http://www.gochinaauto.com/modules/wordpress/index.php/2009/11/20/volkswagen-everything-is-ready/

VW starts DSG production in China for local consumption

China based Volkswagen Automatic Transmission Co. Ltd. has begun production of the efficient dual clutch transmission (DSG). 300,000 units will be produced in the first phase of the plan, which will gradually increase to 600,000 units seeing a total of 400 million euros being invested in the Dalian plant. This comes from the 6 billion euro investment package that has been set aside to expand production capacity and develop new vehicles in China from now till 2012.

Besides DSG, VW launched TSI engines in China back in 2007 and have started making most of the components in the country. Will we be getting Chinese made DSGs anytime soon? No, because all units produced in the Dalian factory be used for the local market as there is a great domestic demand for the efficient TSI/DSG combo.

Volkswagen Kassel is the main plant producing DSG units in Europe and the Dalian plant has been set up with on site support from Kassel based experts. Chinese staff have also received specialist training in Kassel before production started.

“The start of DSG production in China is another important step for Volkswagen Group China. We can progress towards our goal of further extending our market share while at the same time achieving a greater reduction in the fuel consumption and emissions of our vehicles by fostering progressive powertrain technologies,” said Dr. Winfried Vahland, President and CEO of Volkswagen Group China.

http://paultan.org/2010/05/12/vw-starts-dsg-production-in-china-for-local-consumption/

Volkswagen AG's car venture with SAIC Motor Corp plans to make an electric car, joining Nissan, Daimler and other automakers planning green car projects in the world's biggest auto market.

Tantus, which will be produced by Shanghai Volkswagen, is already on a list of approved new vehicles, according to China's Ministry of Industry and Information Technology.

A Shanghai Volkswagen spokesperson declined to comment.

Beijing has declared the electric vehicle industry a top priority, earmarking $1.5 billion a year for the next 10 years to transform the country into one of the leading producers of clean vehicles.

But customers so far remain unimpressed by the high cost, limited range and lack of charging infrastructure for the vehicles.

In Shanghai, with more than 20 million people, there are only 10 registered electric cars, while the number in Hangzhou is only slightly higher at 25, according to China Business News.

Still, Daimler AG, Nissan Motor and General Motors have all committed to make and sell electric cars in partnership with their local partners.