Volkswagen sets sales records

The top-selling brand in China is a common sight on the road and elsewhere across the nation. Jing Wei

Despite the global economic downturn, Volkswagen Group China (VGC) expects robust growth in 2009, said the company's top executive.

"We are optimistic, with an outlook of double-digit growth for the whole year," VGC President and CEO Winfried Vahland said.

Helped by government stimulus policies begun early this year, VGC registered 22.7 percent annualized sales growth to more than 650,000 cars in the first half of 2009, a figure that "meets company's initial forecasts", the top executive said.

Government incentives, including a sales tax cut on cars with engines under 1.6 liters, have boosted confidence in the entire Chinese auto industry, he said.

VGC has been a beneficiary because it "has always attached great importance to R&D and manufacturing of cars with smaller engines", he noted.

"Whatever the timing of the world economic recovery, I believe the Chinese government's policies to provide support and incentives - as well as the growth of China's auto market and consumer confidence - will remain unchanged," Vahland said.

He predicts that more than 7 million passenger cars will be sold in China this year.

Last year's car sales reached nearly 6.1 millions units, according to the industrial data.

Vahland's forecast is in line with the target of 10 percent annual growth in car sales that the Ministry of Industry and Information Technology set for 2009-2011.

Fiercely competitive

While the global auto market shrinks dramatically and a growing number of overseas carmakers are slashing production or restructuring to survive, China's market remains robust - and as a result is now one of most fiercely competitive in the world.

Against that backdrop, Volkswagen is stepping up expansion in the country, as are other overseas carmakers.

In the second half of the year VWG plans to debut an all-new Golf and other popular models with 1.4 TSI engines, as well as the Audi Q7 and a Volkswagen SUV, according to Vahland.

"Such timely introduction of so many new products could lead in the industry," the CEO said.

Introduction of VW's renowned TSI+DSG powertrain is expected to meet China's environmental goals as well as increase driving pleasure.

Volkswagen's Scirocco and Magotan models are equipped with the powertrain. More will be added to the list in the future as VGC has already started manufacturing TSI engines in Shanghai and Dalian in Liaoning province.

Its products not only serve the traditional sedan market, but also other sectors including sports cars, sports utility packs and multi-purpose vehicles, he noted.

The Audi Q5 and a VW SUV will be introduced in China to further enrich the group's product line, Vahland added, but without revealing a specific timeline.

In addition to bringing new models to China, VGC is increasing investment in its sales channels, Vahland said.

"It is not sufficient to merely increase sales numbers and the size of the service network. VGC is more concerned with a more profound content."

He said the effort includes stable partnerships with dealers and service providers, and providing consumers with products that better satisfy their needs.

Brand building is another key Vahland cited for his company's success.

Its partnership in the Beijing Olympic Games enabled VGC - along with joint partners Shanghai VW and FAW-VW - to further build its reputation, which then boosted sales.

The company and its joint ventures sold more than 1 million cars in China last year, a 12.5 percent year-on-year increase, a record in VGC history.

"Our business performance and growth in recent years shows our image as an innovative, responsible and reliable company has been fully recognized by people within the automobile industry and consumers," the CEO said.

(China Daily 07/27/2009 page7)