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Volkswagen set to double China sales

By Li Fangfang (China Daily)
Updated: 2009-02-27 08:04

German carmaker Volkswagen AG plans to double its annual China sales by 2018, the company said yesterday.

Related readings:  Volkswagen says China sales up 12.5% in 2008  2 Volkswagen plants to partly suspend production in China  VW not to halt production in China

"We are targeting sales of 2 million vehicles in China by 2018 from the current annual sales of 1 million," said Winfried Vahland, executive vice-president of Volkswagen Group and president & CEO of Volkswagen Group China. This is part of the group's 10-year strategy plan.

Volkswagen's Chinese joint ventures, Shanghai Volkswagen and FAW-Volkswagen, would equally help in achieving the target, said Vahland.

Volkswagen Group China would coordinate with Shanghai Volkswagen and FAW-Volkswagen to double their dealership numbers, from the current 1,000 dealers, he said.

Between this year and the next, Volkswagen, Audi and Skoda would launch more than 10 new or updated models in China, the company said.

"The first one or two years of our Strategy 2018 would be full of uncertainties as it will be affected by the industry downturn due to the global financial crisis," said Vahland.

"If we stop the investment flow now, we might have trouble after the downturn ends."

Vahland also told China Daily that Volkswagen would not change its 2007 plan to invest 2.4 billion euros in the country. In 2005, Volkswagen chalked out a three-year strategy called Olympic Program that focused on improving efficiencies and reducing costs.

"The success of our Olympic Program provided a good foundation for our next strategy, making Volkswagen confident about such a long-term perspective," said Vahland. "We expect China to be our biggest market very soon."

Last year, it achieved an earlier sales target of selling a million vehicles. It sold 1.02 million vehicles in China, with a year-on-year growth rate of 12.5 percent. That compared to a 6.7 percent increase for the whole industry, its slowest pace in a decade. Total vehicle sales were at 9.4 million in 2008.

As per Strategy 2018, Volkswagen will analyze long-term trends in China's automobile industry and make plans in the areas of sales, customers, products, technology, production, supply, responsibility and partnership.It will also seek more business opportunities in China's second- and third-tier cities, said Vahland.

Volkswagen has sold more than 7.3 million vehicles in China since it established its first venture with SAIC in Shanghai in 1984. It has invested 6.8 billion euros in the country, accounting for 20 percent of the total investment in China's automobile industry.

China has been the focus for many international automakers as it provides them with a cushion to offset huge losses in Western nations. While the major automobile markets of North America and Europe are shrinking, China is expected to grow by 3 to 6 percent this year.