Even if you are not yet familiar with Volkswagen Import China, you certainly know its product, such as The Beetle, Scirocco, Touareg, The Phaeton and the imported Golf Family.

　　In 2002, when Volkswagen began to build its imported car business in China, no one could predict that within 10 years, it would become a driving force at Volkswagen China. The other two key driving forces are, of course, Shanghai Volkswagen and FAW-Volkswagen.

　　"The three companies strategically complement each other", said Mr. Paul Hu, Managing Director of Volkswagen Brand, Volkswagen Group Import (China), six months ago in an exclusive interview with Auto Sohu at the Rand Maxi Restaurant in Guangzhou. "Innovation, value and responsibility are the core values that Volkswagen adheres to, and Volkswagen Import China is focused on pushing innovation."

　　"Innovation" is the heart of the mission of Volkswagen brand. Over the past few years, Volkswagen Import China’s sales have nearly doubled each year. Its sales grew rapidly from 10,000 to 20,000 units, then to 40,000 units. In 2011, the figure was 57,000 units. In 2012, that figure was reached within just the first three quarters. Compared with the approximate 20 percent growth rate of the imported car market, the growth rate of Volkswagen Import China is racing ahead at nearly doubling its sales annually.

　　Mr. Hu recognizes this achievement. "We agree that the numbers are not so bad, but we are not yet satisfied, and we want to achieve even greater progress."

　　According to Auto Sohu’s analysis, two factors could contribute to improved performance of Volkswagen Import China. One is product portfolio. Volkswagen Import China has personalized and diversified product lines. Volkswagen Import China launched seven new models in 2012, and has planned 13 limited and personalized versions of models to be introduced in 2013. This is an important factor for driving forward the sales growth of Volkswagen Import China.

　　Mr. Hu is also clear that these different models will play different roles as Volkswagen Import China continues to develop. For the Phaeton, carrying out its brand mission is about more than just sales. The burden of supporting sales lies instead on products like Touareg and The Beetle.

　　The second key factor for improved performance is in distribution channels.

　　Today, Volkswagen Import China has 120 dealers in operation. "In terms of adding new dealers, we mainly consider the second- and third-tier cities and remote cities inland," said Mr. Hu. These areas include Urumqi, Xinjiang, Xining, Qinghai and Lhasa. The aim is to bring products and services to remote areas, to better meet the needs of local consumers.

　　To approximate based on 100 dealers and annual sales volume of 80,000 units, the average annual sales of a single dealership of Volkswagen Import China is equivalent to 800 units. According to Mr. Hu, this figure can profitably support dealers.

　　Mr. Hu frankly stated to Auto Sohu that in 2013 Volkswagen Import China will emphasize the concept of "product families" or "clusters". The products have been divided into five clusters: fashion, sporty, off-road, family, and business. "The key is to see things from the customer’s point of view, to see what models customers need and make sure the products suit their needs."

　　In the interview, Mr. Hu disagreed when Auto Sohu proposed that he had returned to bring innovation and change to Volkswagen Import China. Instead, Mr. Hu said, "We are standing on the shoulders of a giant. In the past six months, Volkswagen Import China has already made many gains. Now we must take things to the next level by focusing on innovation. "

　　Face Time Interview

　　Auto Sohu: How do you evaluate the performance of Volkswagen Import China, and determine if its performance lives up to your expectations?

　　Mr. Hu: Volkswagen Import China is developing faster, with sales doubling nearly every year. Its sales grew from 10,000 units to 20,000 units, then to 40,000 units. In 2011 the figure was 57,000 units, but in the first three quarters of 2012, sales had already reached the same level they achieved the previous year. It might look like we are in the midst of our victory lap, but we in fact hope to accomplish still more.

　　From January to October 2012, Volkswagen import China sold nearly 65,000 units, year-on-year growth of 42 percent. Compared with the 20 percent growth rate of the imported car market as a whole, our growth rate nearly doubled. We agree that the numbers are not so bad, but we are not yet satisfied, and we want to achieve even greater progress.

　　Auto Sohu: What have you focused on since you returned to Volkswagen Import China?

　　Mr. Hu: Over the past six months, my main work has focused first on new products. In 2012, we launched seven new models. These seven new products are driving our sales growth. My second area of focus has been network construction. Today, we have 120 dealers in operation.

　　Auto Sohu: How high was this figure six months ago?

　　Mr. Hu: About 70. Our network expansion is quite swift, and it is focused more on second- and third-tier cities, especially in the central and western regions. To approximate based on 100 dealers and annual sales volume of 80,000 units, the average annual sales of a single dealership of Volkswagen Import China’s is equivalent to 800 units. This is a relatively healthy sales figure for a single dealership.

　　In 2013, network layout will grow further, but we will pay greater attention to quality and focusing on the strategy behind the network setup. This will take the form of our satellite "1 + n" network, such as our authorized 4S dealership in Urumqi. Then, investors can build two to three satellite dealerships in relatively remote markets such as Kashgar and Turpan.

　　Auto Sohu: Volkswagen Import China has undergone significant changes since your return. Is this because Volkswagen is paying more attention to the Chinese market?

　　Mr. Hu: Volkswagen’s focus on the Chinese market is not due to my return. In fact, Volkswagen Import China has long played a very important role in China. As we all know, in addition to Volkswagen Import China, we also have two joint ventures – Shanghai Volkswagen and FAW-Volkswagen – in the Chinese market. These three corporations strategically complement each other. Innovation, value and responsibility are the core values that Volkswagen adheres to, and Volkswagen Import China is focused on pushing innovation.

　　Auto Sohu: How should we understand this concept of "innovation"?

　　Mr. Hu: Innovation means three things. First is model innovation. We aim to provide more advanced models, and many of these models will strategically complement the work of the joint ventures. Second is technical innovation. Through imports, we introduce technologies to the Chinese market that have not been localized yet or will be localized in the future. Third is service innovation: all 4S dealerships of Volkswagen Import China are built in accordance with our high global standards.

　　Auto Sohu: What is the most effective way to market such a rich product line with relatively limited resources?

　　Mr. Hu: From 2011 to 2012, Volkswagen Import China launched quite some new products, so the investment on marketing had to be guaranteed. Since these products are launched, we have been able to focus our resources and efforts on two important things:

　　First on "personalization" of the models that have been launched. We will introduce 13 limited and personalized versions of these models in 2013. Ultimately, the imported car market will be a highly personalized market.

　　Second, in terms of product marketing, we will integrate products that have close positions into our cluster concept. The key is to see things from the customer’s point of view, to see what models customers need and make sure the products suit their needs. We have five clusters of cars: fashion, sporty, off-road family, family, and business.

　　Auto Sohu: Is this concept of clusters of cars your own innovation?　　 

　　Mr. Hu (laughing): We are standing on the shoulders of a giant. In the past months, Volkswagen Import China has been thinking about a proper way to communicate its products. This concept is the result of our collective thinking in the past months.  

　　Auto Sohu: Among these five clusters of cars, which do you like most?

　　Mr. Hu: I personally prefer the sporty cluster. That is the reason we selected to display The Beetle 2.0TSI Turbo version and Beetle Rsi with motion colour at this interview. All cars are inherently related to dynamic performance.

　　Auto Sohu: The Phaeton has achieved a 30-fold increase in sales in 10 years since its launch, which is a remarkable achievement. In your opinion, why has the Phaeton been so widely recognized?

　　Mr. Hu: As a strategic model, the Phaeton carries the mission of further strengthening the Volkswagen brand. Since 2008, we have established several Phaeton Centres. After four years, sales of Phaeton reached about 6,600 units in 2011, from just 200 to 300 units in the early stages. That is an increase of nearly 30 times. This success is closely related to the services that the Phaeton Centres offer.

　　Auto Sohu: The Beetle is more masculine in its design. It’s filled with a sense of muscle. Do you worry this might drive away some female consumers?　　 

　　Mr. Hu: The Beetle indeed faces challenges. After all, this is a model that has disappeared for some time in the past. Now we are investing a great deal in marketing to re-establish The Beetle. This is the first challenge.

　　The second challenge is a shift in market positioning. How should we transform a model that was seen as a model for females into a model popular with both sexes? Sales of The Beetle need to be high, and the model should be personalized.

　　The Beetle offers three engines, three personalized versions and various other services that enrich The Beetle Family to better meet the needs of different consumer groups. Most importantly, we must promote the culture of The Beetle. The Beetle should pay tribute to the first generation, while maintaining its own identity. In 2013, we will make effort to see this model succeed. Whatever the result is, this model deserves our efforts.

　　Auto Sohu: What considerations were behind the decision to open a 4S dealership in the Tibetan Autonomous Region? After all, there are few dealers in Tibet.

　　Mr. Hu: We believe that if our customers are there, our services should be there. Wherever the market goes, we will build new dealerships there to serve our customers. As you know, it is challenging to recruit dealers and sales people in Tibet, so a large part of the staff was recruited from Chengdu. We had to build local dormitories to ensure that staff did not need to worry about their work and life conditions.

　　Auto Sohu: How do you market in regional markets where awareness of Volkswagen Import China is not as high?

　　Mr. Hu: Marketing in such areas follows two key strategies. First, we do not emphasize that we are "Volkswagen Import China" as an entitiy. We hope to maintain the unity of the Volkswagen brand, which is one whole. Second, we tailor our work to the specific conditions of the region. Currently, we operate in four key regions. The number of dealers and sales under management of each region is at about 25 percent, which is balanced. What we want to do but have not achieved yet is to deepen our marketing in these regions.

　　Auto Sohu: Many of your efforts and innovations are not seen among other enterprises.

　　Mr. Hu: Other companies do many of the same things, but we believe Volkswagen Import China has its own characteristics in terms of positioning, product offer, and services. Over the past six months, we have taken a small step. Expect even more to be accomplished in 2013.