Volkswagen set to explore deeper and wider to grow sales in China

German carmaker makes sedan its own marque and forms ties with ride-hailing Didi

In a fast-changing market like China, even a brand as ubiquitous as Volkswagen will not relax for fear of losing hard-won turf, as local carmakers are taking on international rivals and car ownership is threatened by ride-hailing services.

And the best defense is a good offence. Last week, the German carmaker developed its Jetta model into a standalone brand, hoping to get a slice of China's entry-level market by tapping into the model's national success.

"It (Jetta) brought mobility to the masses, just as the Beetle did in Europe," said Juergen Stackmann, Volkswagen brand's board member responsible for sales, marketing and after-sales, in a statement.

Positioned under Volkswagen, Jetta is targeted at the vast number of China's first-time car buyers in smaller cities, who usually choose Chinese or South Korean brands.

According to Jefferies Hong Kong, Great Wall Motor and Geely were among the most popular brands in tier-3 to tier-5 cities in January, with 97 percent of their sales being mid-to-low-end sedans and SUVs.

"With Jetta, we will close a gap in China between the established Volkswagen brand in the upper-volume segment and entry-level mobility, something that makes up about one-third of the Chinese market and serves local brands above all," said Stackmann.

According to Volkswagen, 81 percent of vehicles sold in China's entry-level segment are to people who are buying a car for the first time.

Volkswagen said Jetta is not an economy brand but one that offers "high quality, safety, stable values and a fresh design".

Its target customers will be aged 25-35, modern, family-oriented and open-minded.

Stephan Woellenstein, CEO of the Volkswagen brand in China, said: "The core of the new brand will contain Volkswagen's own DNA and will provide consumers with advanced technology that meets their needs and fits their lifestyles."