Post-“2018 Strategy” era

　　In the Chinese automobile market where dust is gradually settling, Volkswagen, with its 20% market share, is indisputably the leader. Many unresolved problems notwithstanding, it is still reigning supreme in China.

　　Stand on any street for 5 minutes, and you will see that is no exaggeration. To back it up, in the first 10 months of this year, FAW-Volkswagen and Shanghai-Volkswagen – the company’s 2 joint venture brands in China – have both seen sales exceed 1.2 million units, a year-on-year increase of 20%. No one would deny that Volkswagen’s “report card” for this year is something worth waiting for.

　　To Heizmann, who assumed the position of President and CEO of Volkswagen Group China last September, this report card bears special significance, because it makes plain what has worked and what has not in the decisions he has made in the first and entire financial year since he took up the post.

　　Compared with his predecessors, Heizmann has an advantage – higher position in the Volkswagen Group, thus more voice. With more knowledge of the Chinese market, richer practical experience and more power, his primary mission is widely believed to be ensuring the smooth implementation of the Group’s “2018 Strategy”.

　　According to this strategy, the Group’s annual sales volume should reach 10 million units by 2018, with over 8% profit margin before tax. Heizmann said repeatedly after becoming President and CEO that the company’s performance in China is key to “making or breaking” the goal set in the strategy.

　　A year later, the mystery shrouding Heizmann’s management of the company has lifted. Continuing to carry out the “South Strategy” and West Strategy“, maintaining the 20% market share, increasing the number of locally produced models to 30 by 2015, investing nearly 10 billion Euros in the next 3 years, raising production capacity to 4 million units by 2018……In the next few years, Volkswagen China will accomplish these feats one by one, continuing to consolidate its unequalled position in the world’s biggest auto market.

　　As a matter of fact, to today’s Volkswagen China, big investment and more new cars or not, its goal has long gone beyond the “2018 Strategy”. In the 2012 financial year, Volkswagen Group’s sales volume has surpassed the 9 million mark; the profit from its comprehensive operation has experienced slight growth, reaching a new high of 11.5 billion Euros, which does not include the 3.7 billion Euros in equity earnings from the joint ventures in China. It can be calculated, therefore, a mere 8% growth is enough for the Group to achieve its goal of 10 million units ahead of schedule.

　　Compared with the soon-to-be-achieved “2018 Strategy”, a subject worthier of discussion and planning is the path Volkswagen Group and Volkswagen China will take after realizing annual sales of more than 10 million units. Does Heizmann, the old China hand, already have a complete “China blueprint” in his mind? How will the company, already reigning supreme, scale new heights? To answer these questions, Volkswagen China needs to show the public new changes in Heizmann’s term.