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Shanghai Volkswagen: The legend continues

By Han Tianyang (China Daily)
Updated: 2011-04-25 14:29

Shanghai Volkswagen sold 212,000 VW brand and 47,000 Skoda cars in the first three months of 2011. [Photo / China Daily]

'Extraordinary products and accurate market position' mean strong Q1 sales

Shanghai Volkswagen, the top passenger car joint venture in China, continued to register strong growth in the first quarter of the year with more than 212,000 VW brand and 47,000 Skoda cars sold.

The 26 percent rise in its VW sales over a year ago and Skoda's 11 percent increase are the result of the company's "extraordinary products and accurate market position", said Joern Hasenfuss, deputy managing director and commercial executive director of Shanghai Volkswagen.

The company now makes the widely popular Volkswagen Lavida, Passat, Polo, Touran, Tiguan and Santana models.

Its Skoda lineup includes the Fabia, Octavia and Superb, covering segments ranging from subcompact to mid-sized.

The joint venture launched its knockout new product on April 17 - the new Passat. Developed by Volkswagen AG and Shanghai Volkswagen, it is billed as a combination of "German engineering and Chinese creativity".

"As a cooperative masterpiece of Shanghai Volkswagen and the Volkswagen Group, this (new Passat) signals even better integration of Shanghai Volkswagen's R&D capability and Volkswagen Group's development system," Hasenfuss said.

"It also means the innovation competence at Shanghai Volkswagen has reached a new level," he added.

1 million Passats

By the end of last October, a total of 1 million Passats had been sold in China since the model first arrived in 2000.

Hasenfuss said he is convinced the new Passat will also see strong market performance and continue the legend.

He noted that after explosive growth in the past two years, the Chinese auto market is trending toward more stable development.

"The central and western regions will become the focus of the next phase of growth because of favorable government policies," he said.

"So Shanghai Volkswagen has been working on building sales and service networks in those areas, especially in second- and third-tier cities.

"With accelerating urbanization, we estimate the total passenger vehicle demand in 2020 will hit 20 million (in China)", he said. "It will create massive opportunities for Shanghai Volkswagen."

But the joint venture's targets are more than just greater sales figures, according to Hasenfuss.

He said the company also aims to be the most profitable auto enterprise, the most appealing employer and the company with the most loyal customers.

At the ongoing Shanghai auto show, the joint venture is displaying the best of its two brands as well as the latest in new energy vehicles to respond to the exhibition's theme "Innovation for Tomorrow."

According to Hasenfuss, the company is displaying not only products at the auto show, but also its strength and confidence.

Hasenfuss also noted sustainable development is evident in the manufacturing techniques at Shanghai Volkswagen as well as its eco-friendly products.

He said the joint venture pays close attention to protecting the environment and saving resources in every link - from building the factory itself to making automobiles - and is the first auto company to receive ISO 14000 certification in China.

Skoda brand

Of the company's two brands, Skoda is a much younger cousin that arrived in China just four years ago. But its sales have increased rapidly. Some 200,000 Skodas were sold last year.

"As a latecomer in the market, Skoda must offer a more distinctive user experience to customers to stand out in the fierce competition," Hasenfuss said.

The Czech brand now has a club in China with 220,000 members that provides maintenance, after-sales services and information ranging from daily life to social and entertainment activities, according to Hasenfuss.

This year, the brand set up the first auto customer center at Beijing Capital Airport to provide personalized services to Skoda owners.

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Hasenfuss said Skoda will further enhance the brand through quality services in the years to come to build its profile and sales.

Hasenfuss also noted that the global supply chain for parts and components have been affected by the recent earthquake and tsunami in Japan.

He said a comprehensive and highly localized network of suppliers has been formed by Shanghai Volkswagen in its 20 years in China, helping shield the company from such external challenges.

"The quality of components and parts determines the quality of a car," Hasenfuss said, noting the joint venture has strict quality control standards in choosing suppliers and purchasing parts.