FAW-VW: the first China-made Seat Ibiza

　　As first overseas-invested enterprises entering Chinese market, FAW-VW and Shanghai-VW, Volkswagen’s two Chinese joint ventures, have already made good money by their 20 years operation in China. Almost every vehicle model issued by them performs well enough to shake the whole Chinese market, except one or two unpopular models. VW has launched its multi-brands strategy to grab Chinese market. Besides VW brand, its subsidiary brands, such as Audis and Skoda have entered Chinese market. After spurred by the huge boom in auto market in 2009, almost every automaker has endeavored to expand its production capacity in 2010. However, FAW-VW has always ranked behind Shanghai GM and Shanghai VW because of its production capacity. VW has started its south strategy, since FAW-VW had established a plant in Chengdu, according to auto sohu.

　　Recently, FAW-VW has verified its new Guangdong plant, and decided the new plant would be located in Shishan county, Foshan, Guangdong province. Thus, it has made an official start of VW’s south strategy. Compared with FAW-VW, Shanghai-VW has launched its capacity expansion in pretty low key. After all, FAW-VW is much more urgent to grab China’s south market. As for the newly-produced products, Seat entering China has been finalized according to all sources. It’s the second time for Seat to land in Chinese market. Probably, consumers would feel the brand a little unknown, but speaking of its products, they have indeed existed around us in pretty low key. As earlier as 1997, the newly-established FAW-VW has assembled the old Seat Cordoba in the way of CKD, and then named it Golf after it put on a logo of VW, and Yinggeer are all from Seat, used to be produced by Nanjing auto.

　　In the beginning of reform and opening up, imported and smuggled Japanese vehicles have been well received by consumers in southern China rather than the northern, depending on its dynamic and individual designs. Further more, Hong Kong, nearing to south China, would bring much more convenience for modifying Japanese vehicles. Judging from the hot modified vehicles in Zhuhai, it’s not difficult to see that consumers in south China tend to give preference to vehicles with dynamic and individual designs. However, VW impresses consumers with its convention, and individuality is what it lacks.

　　As a subsidiary company of VW, Seat mainly manufactures dynamic and individual vehicle models, which quite meet demand of southern market. Rumors about Seat have never ceased after Skoda was brought into Shanghai-VW. In a special interview in 2008, Winfried Vahland, CEO of Volkswagen Group China, has said” The question is not whether the Seat brand will come to China, but when it will come” . Seat chairman Erich Schmitt has clarified that Seat is planning to enter the fast growing Chinese market, and it will be an important strategy to achieve sales target. He also said the company will choose some coastal cities as its pilot market. In July of the same year, senior executives of Seat have discussed the development of Seat in China with some dealers of Audis in Shanghai. Erich Schmitt said to those dealers in pride “We have achieved more sales and earned more money. Now there is no European brand could look down upon us.” He hoped to lay a foundation of channels for Seat entering Chinese market by virtue of those dealers.

　　VW's capacity expansion of the south strategy aims at grabbing the whole Chinese market from high end to low end products. Speaking of FAW-VW’s products, Jetta, once an A-class model, has fallen down in the bottom of its low end products. Compact vehicles, like POLO, are what FAW-VW lacks now. FAW-VW has no way out when facing the growing market of compact vehicles. Young buyers will barely purchase Jetta, when they plan to choose compact vehicles. However, the introduction of Seat will pull out of FAW-VW from its predicament in the market of compact vehicles. Seat will attract more potential buyers of Honda Fit and Ford Fiesta by virtue of its dynamic and individual designs and European style promotion. Therefore, Ibiza, the most popular model in Spanish, will be the first Seat vehicle model produced by FAW-VW’s new plant.

　　Although VW has not yet disclosed all information of the newly-produced model, Chinese made Seat has been pretty decided, and Ibiza, the first model, entering Chinese market will be nearly settled from all evidences. FAW-VW’s engine plant in Dalian has kept producing 1.4T engines. The engine is just the power heart of Ibiza which is sold in Spanish. It’s certainly not a bad choice for FAW-VW to use Audis for grabbing high end market, Seat for low end, and VW and Skoda for middle market. (Translator: Qinghua: Serena)

　　See original Chinese report please click: http://auto.sohu.com/20100512/n272083819.shtml