Volkswagen China Goes South?
At the upcoming 2009 Guangzhou auto show, Volkswagen China is expected to announce that they will build a plant in southern China, Gasgoo writes, citing reports in sohu.com. Not much else is revealed, not even which of their two Chinese joint venture partners will get the new plant.
Volkswagen cooperates with two companies in China: FAW, based in Changchun in the North, and SAIC, based in Shanghai in East China. Both are bitter rivals.
FAW-VW makes and sells through its own dealership network the VW Jetta (based on the Jetta MK2), the VW NewBora (based on the Jetta MK4),, the VW Sagitar (based on the Jetta MK5), the VW Golf (based on the current MK6 model), and the VW Magotan (based on the current Passat MK6 platform.) FAW also has a joint venture with Volkswagen to build the Audi range.
SVW makes and sells through its own dealership network the VW Santana (based on the Passat/Santana MK2), the VW Santana 3000 (a homegrown design), the VW Passat (based on the MK5 platform), the VW Polo (Mk5 based), the VW Touran MPV, and the VW Gol (based on the Brazilian-bred supermini.)
“To build a plant in South China has been determined. Volkswagen plans to announce its plans at Guangzhou auto show by Fan Ande, CEO of Volkswagen Group China,” a mysterious source in Volkswagen said according to Sohu. That source doesn’t know the name of its boss. “Fan Ande” appears to be a chinafied version of Winfried Vahland, who’s the real boss at Volkswagen Group China.
Geographic weakness has always been the chink in Volkswagen’s otherwise shining Chinese armor. SVW cars are strong in the East. A visitor to Shanghai may get the impression that VW’s lineup consists only of Santanas, just by looking at the taxi fleet. FAW cars are strong in the North. The Jetta is as ubiquitous in Beijing and points north as the Beetle was in post-war Germany. In China’s populous South, VW is weak with a market share of only 5 percent. China’s South is dominated by cars with Japanese roots. If VW wants to unseat Toyota by 2018 (as proscribed in VW’s “Strategy 2018”) then they need to flush out the Japanese from the Southern Region, where 35 percent of China’s booming new car market are sold.
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