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New boss for VW, emphasize Chinese auto market

From:Internet Info Agency 2019-01-11 15:31:40

In 2018, the Volkswagen Group completed a new management structure adjustment. After the official retirement of Volkswagen Group Management Board, President of Volkswagen Group (China) and CEO Prof. Dr. Jochem Heizmann, Herbert Diess, the chairman of the Volkswagen Group Global Management Board, will take responsibility for China business. At the same time, Dr. Stephan Wöllenstein, CEO of Volkswagen China, will be the CEO of Volkswagen Group (China). Dr. Diess’s visit to China this time demonstrates his understanding of the importance of the Chinese market.

According to the plan, the new management structure will be effective in mid-January 2019. January 7, Dr. Diess, Dr. Stephan Wöllenstein and Prof. Heizmann finished their work handover. After that, they then communicated in depth with IIA. The most impressive thing is that, according to Dr. Diess, brands of the Volkswagen Group has a market share of about 20% in China. In his view, the Chinese market has the most important significance for the future of the Volkswagen Group, and the Chinese market may determine the future of the Volkswagen Group.

In the context of the sluggish Chinese automobile market, the Volkswagen Group still achieved a growth of 0.6%. The total sales volume increased by more than 20,000 units on the basis of 2017, surpassing 4.2 million units for the first time. Compared with the 2.81 million vehicles in 2012, it has achieved nearly 50% growth in six years, which shows the potential of the Chinese market.

During the communication, Dr. Diess expressed his heartfelt gratitude to Prof. Heizmann for his endeavor and mentioned that he and Dr. Stephan Wöllenstein will take over the relevant business in the Chinese market. Dr. Diess will take responsibility for the Chinese market business from the group level, while Dr. Wöllenstein will be responsible for specific matters. When talking about Dr. Wöllenstein, Dr. Diess thinks he is the best candidate to take over the Chinese market.

Dr. Diess said: "Compared with other countries, China has a clear strategic plan. China is vigorously promoting new energy vehicles, intelligent connectivity, electric vehicles, and autonomous driving. We attach great importance to the further opening of the Chinese market. And we will also invest more in the business in China."

Operations in China is highly integrated

When talking about the current status of the Volkswagen Group in China, Dr. Diess introduced that the Volkswagen Group's operations in China today have achieved a high degree of integration, and only the development of the platform and part of the design set in Germany. The reason for this is that if everything is dominated by Europe, then Volkswagen will not be able to catch up with the speed of the Chinese market and to meet the changing needs of customers, such as the changes in intelligent connectivity and autonomous driving. When the Volkswagen Group developed rapidly in China, it will also ensure that it is more competitive globally.

Talking about how Volkswagen should develop in China, Dr. Diess talked about the three major areas of the future development of the Volkswagen Group. The first is the standardization of power systems for new energy vehicles. Volkswagen's MEB platform, in the future, will involve more technologies from China. This is followed by major innovations in the automotive industry, including microcontrollers, processors, software and connectivity upgrades. In this regard, Volkswagen will then cooperate with more Chinese companies. Finally, in terms of autonomous driving, the Volkswagen Group will also conduct further research with its partners.

When talking about new energy vehicles, Dr. Diess said: "I am optimistic about the development prospects of the Chinese electric vehicle market. Not only because of subsidies, but because China has very clear development plans, such as the construction of battery factories. And Volkswagen will launch the next generation of electric vehicles in 2020."

Not long ago, the Volkswagen Group announced that, by the end of 2023, Volkswagen will invest about 44 billion euros (about RMB 344.2 billion yuan) to develop electric vehicles, autonomous driving, new mobile travel services, vehicles and digital factories. But in fact, the amount of investment is much higher than this. The 44 billion euro investment plan does not include joint ventures in China. Foreign-invested companies generally choose to reinvest with this money, so the joint venture will each invest in products and factories.

In the Chinese market, Volkswagen and its Chinese partner program will invest more than 4 billion euros in 2019 to support the Group's growth in areas such as electric vehicles, connectivity, mobility services and new product development. And they promised to add 30 new energy models in the next two years, 50% of which will be made in China. It is estimated that about 400,000 new energy vehicles will be delivered in the Chinese market by 2020, and approximately 1.5 million by 2025. The third joint venture company, JAC Volkswagen, will also develop the Seat electric vehicle as planned. The tens of billions of investments and goals highlight the ambition of Dr. Diess and this world’s largest automaker.

Creating a third brand is intended to create competitiveness in more market segments

In recent years, in some low-end markets, the rapid development of Chinese car brands alarmed Volkswagen. And that is why the third brand of Volkswagen came into being. According to the plan, the new sub-brand of Volkswagen will be officially released on February 26th in Wolfsburg, Germany, which is intended to compete with the lower-level brands.

Volkswagen's new sub-brands focus on lower-level markets and will meet the needs of young consumers, with both stylish and practical features. In the future, Volkswagen's new sub-brand products will form a complete system with products of FAW-Volkswagen brand and FAW-Volkswagen Audi brand, developing the multi-dimensional market. According to previous reports, the new brand is expected to compete positively with Chinese car brands in the price range of 6-15 million yuan.

Summary: The growth momentum of China's auto industry has slowed down last year, and even negative growth has occurred. However, the production and sales volume of about 28 million vehicles is enough to attract the attention of various auto companies. Therefore, the phrase "the Chinese market determines the future of the Volkswagen Group" is not an empty talk. From the current situation of the Volkswagen Group, the emergence of new plans and new bosses will surely lead Volkswagen to a new level.

Editor:Wang Lei