Volkswagen South China Strategy Works

　　The 8th China (Guangzhou) International Automotive Exhibition, focusing on the theme of “Tech﹒Future” is being held at Pazhou Convention & Exhibition Center from December 21 to December 27, 2010. During the show, Sohu Auto will interview senior executives of auto manufacturers participating in the show in order to conclude auto manufacturers’ market performance in the last year and look forward to tendency and prospect of Chinese car market in 2011. The following is our interview of Hu Bo, marketing director of Volkswagen brand of Volkswagen (China).

　　Sohu Auto: Welcome to Sohu Auto’s interview room. First of all, please introduce the highlights for Volkswagen participating in the 8th China (Guangzhou) International Automotive Exhibition.　　

　　Hu Bo: Volkswagen has set up an exhibition booth covering a total area of 3,000 square meters, thus becoming the brand with the largest exhibition area at the auto show. This year the Volkswagen brand presents a powerful line-up of 33 models, together with FAW-Volkswagen, Shanghai Volkswagen and Volkswagen Import Co. LTD, of which visitors are familiar with and concerned about. Volkswagen Import mainly highlights the new hybrid version of the Touareg while Shanghai Volkswagen presents new POLO, new Touran and FAW-Volkswagen shows CC. Volkswagen CC became a hot-selling product immediately when it was introduced to the market.

　　Sohu Auto: Can you introduce the achievements of Volkswagen's “South China Strategy” this year?

　　Hu Bo: Volkswagen Group unveiled “South China Strategy” at China (Guangzhou) International Automotive Exhibition last year. Through the “South China Strategy”, Volkswagen plans to increase its sales and market share in six provinces in the south. Meanwhile, Volkswagen hopes to further expand channel construction to improve product and service satisfaction. Volkswagen Group’s share in the south China market has increased by 2 percent, rising from 13.2 percent to 15.2 percent. Volkswagen Group plans to be the number one in six provinces in the south China. As a result, Volkswagen launched a series of new models in the South China market, for instance, Shanghai Volkswagen Tiguan was listed in Shenzhen of the south China market. Besides, Golf GTI was also listed in the South China market. The above actions improve the entire product structure of Volkswagen, and help Volkswagen take the leading position in customer satisfaction while maintaining the rapid business growth. These products rapidly became hot-selling products in the south China market.

　　Sohu Auto: According to the plan released by Volkswagen Group this year, it hopes to surpass Toyota as the largest auto manufacturer in the word by the end of 2018. During this process, how do you think Chinese car market’s role?

　　Hu Bo: Chinese car market is playing an important in the entire global strategy of Volkswagen, and now China is the largest overseas market for Volkswagen Group. From the perspective of brand, Chinese is one of the largest markets of Volkswagen Group. What’s more, Chinese car market is expected to grow rapidly in the next few years, so China's status within the Volkswagen Group is self-evident. Volkswagen Group is very concerned about Chinese car market, ranging from the Group's board of directors to the senior leadership. Additionally, Volkswagen announced to invest 6 billion Euros in China, of which 1.6 billion Euros are the new investment, aiming at increasing production capacity and finding the solution to the current status of processes so that Chinese consumers can mention long-awaited Volkswagen vehicles as soon as possible.

　　Sohu Auto: For Volkswagen Group, an important thing this year is the establishment of a joint plant in the south China. So we want to know the current situation of this plant?

　　Hu Bo: This plant is well underway to promote. In June we signed the agreement with Foshan, Guangdong. In addition to setting up a production base in Guangdong to improve our production capacity, we plan to build a distribution center in Guangzhou. Through the new distribution center, Volkswagen can provide customers in the south China market with imported Volkswagen vehicles as soon as possible, which is one of the important initiatives.

　　Sohu Auto: How about the sales of Volkswagen’s high-end Phaeton sedan?

　　Hu Bo: Phaeton sales in China are relatively good. The new Phaeton is impressive for its technical level and appearance. In June, we held the first global test drive of the new Phaeton in Hainan, and this is the first time Volkswagen decided to hold global media test drive of its flagship products outside Germany, which received positive response. Later Volkswagen held the listing ceremony in the Forbidden City, resulting in the how-selling situation of the new Phaeton. From the listing of the old Phaeton to the new Phaeton, Volkswagen plans to sell 4,000 units in China, accounting for large part of Phaeton global sales. Volkswagen, however, is still not satisfied with situation for there is a higher goal the next year.

　　Sohu Auto: What measures Volkswagen have taken to coordinate sales work of FAW-Volkswagen and Shanghai Volkswagen? Since the sales channels cannot be merged, then can Volkswagen take actions in fields such as process and standards?

　　Hu Bo: As far as I am concerned, it’s Volkswagen Group’s honor to have two outstanding joint ventures in China. A lot of work has been done to ensure good sales, take product strategy for example, there are many invisible work including the coordination of pricing, marketing coordination to coordination of the brand promotion. But we also notice the differentiation of the targeted consumers and sales network of the two joint ventures, so we still maintain strong independence in the foreground. But I think ultimately the Volkswagen brand is a complete Volkswagen brand, so it depends on the close coordination and cooperation of joint ventures.

　　Sohu Auto: Speaking of China (Guangzhou) International Automotive Exhibition, many people think it is a retrospective exhibition of the past year, and now auto manufacturers are actively concluding the performance of the 2010. Can you introduce the sales situation of Volkswagen in China, especially the sales situation of imported Volkswagen vehicles?

　　Hu Bo: In 2010, thanks to the great demands of consumers, the Volkswagen brand’s sales in China are still quite good. In the first ten months of this year, Volkswagen Group delivered nearly 1.44 million vehicles in China, up almost 34% over the same period of last year. Sales of imported Volkswagen vehicles are about 38,000 units, which is close to the goal of 40,000 units this year.

　　Sohu Auto: Many experts believe that incentives stimulate a lot of car sales of this year, such as subsidies for energy-saving and environmental friendly vehicles, as well as purchase tax concessions. Incentives including purchase tax concessions will expire at the end of this year, so how do you think about the exit of purchase tax concessions and its impact on Chinese car market in 2011?

　　Hu Bo: Some incentives will expire at the end of this year, and some cities are considering measures to control vehicle population in order to improve urban traffic conditions, which I think will have effects on the entire car market. But I believe the positive development trend of Chinese car market will not change, and the growth rate of Chinese car market in 2011 will decline by 10 percent to 15 percent. (Translator: Qinghua/Wade)

　　See Original Chinese Report Please Clicks:

　　http://t.auto.sohu.com/talk/mhit.jsp?id=77

　　Copyright notice

　　All images and texts displayed on auto.sohu.com are copyright protected. Any unauthorized reproduction in any form is strictly forbidden. Content copy, store or transmit should acknowledge auto.sohu.com as the source of the material.