VW's Martin Winterkorn To World: "Don't Panic!"
“Was uns nicht umbringt, macht uns härter.” Martin Winterkorn’s may not have quoted Freddy in his speech at the International Zulieferer Börse (IZB), related to us via Automobilwoche [sub]. But the CEO of Volkswagen’s theme was clear. “Don’t panic!” Winterkorn said (in German). VW will emerge from the crisis “stronger than ever.” Winterkorn pointed to growth markets such as China– which did little to calm suppliers’ fears (unless they were Chinese). “In China, 100 million people have a driver’s license,” VW’s capo di tutti capi said. Correct. “Only 10 million have a private car,” he added. Wrong. As a matter of fact, nobody really knows how many private cars there are in China. Gasgoo.com once had two numbers in the same article: “The total number of private cars in China jumps 32.5% to 15.22 million units by the end of 2007,” Gasgoo wrote. A paragraph later.. “35.34 million are private cars, an increase of 20.8% from one year earlier.” It’s easy to get confused in China. But if VW, China’s largest auto manufacturer doesn’t know the market’s size, who does? OK, now you can panic. [NB: the IZB is an ingenious cost-cutting measure of VW Purchasing whereby parts suppliers meet in Volkswagen’s Autostadt— and pay for the privilege.]
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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A VW insider related a different version to me: "They have two joint ventures, and an independent import arm in China. So they call them, get three different numbers, and must pick one."
@Bertel Anyway they don't know for sure the size of the market. And they should.
They should have called me. Easy. Market saturation = Population divided by two. 500 cars per thousand is the accepted figure. The U.S. stands at 750 - no wonder that market needs a little Ex-Lax. 1.3 billion people in China (likely more, even that ain't sure) , market size 650 million cars. Winterkorn didn't dare to cite that number, lest the Porsche clan would have committed him to sell 300 million cars next year in China, instead of a very respectable million. Or his speech writers made the wrong call.
Just curious - where does the "market saturation = population/2" rule come from?