By on May 11, 2010

The Chinese leader of the purchasing department of a very large Chinese car manufacturer once informed me: „Clutches? Don’t buy any Chinese clutches. They are all [expletive deleted]. We import all of our [expletive deleted] clutches.” Volkswagen is setting out to change that [expletive deleted] situation.

Today, the newly-founded Volkswagen Automatic Transmission Co, Ltd. started to produce Volkswagen’s tricky 7-speed dual clutch DSG transmission at a projected rate of 300,000 pieces a year. Its capacity will be gradually expanded to a maximum of 600,000 units. The factory is in the port city of Dalian, previously known for its beautiful scenery and beautiful women.

The Dalian facility is the second plant (after Kassel) in Volkswagen’s worldwide imperium to build the demanding DSG transmissions.

Volkswagen swears in their press release that “the locally-produced DSG transmissions will be installed in vehicles for the Chinese market.”

Note that they don’t say “for the Chinese market only.” At 600,000 pieces a year it would take a huge jump in DSG equipped Chinese VWs to absorb that kind of a volume. And if they are made at lower cost in Dalian than in Kassel, expect a Chinese DSG soon in a Volkswagen near you.

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13 Comments on “VW Cranks Out Made-in-China DSGs...”

  • avatar

    Ummmmmmmm so is this an acid test of Chinese quality (re: warranty costs?) Or does this just demonstrate that VW has faith in it’s China opperations? Elighten us of what you make of this Bertel.

    • 0 avatar

      Faith in their Chinese operations (they are quite good) and faith in their own grumpy engineers:

      “Production in Dalian has been set up with on-site support from teams of experts from Kassel. In addition, Chinese employees received training in Kassel to prepare for their upcoming tasks.”

  • avatar

    That will make them more reliable… *snicker*

  • avatar

    That link was EPIC. I didn’t know they could be THAT pretty.

  • avatar

    I wouldn’t buy a VW DSG no matter where it was made. VW quality and engineering plus all those moving parts equals… uh oh.

  • avatar

    If Chinese clutches are made so badly, my guess is that VW is importing the critical components of the DSG units, not locally sourced goods.

    Bertel, I think the comments from your Chinese purchasing acquaintance gives some perspective on your recent post about Chinese mfgs embracing QC with fervor. While some executives and managers recognize the need for improved quality, that view is not entirely universal among Chinese manufacturers.

    Also, the problems we’ve seen in the US with contaminated/adulterated Chinese products (lead paint on kids’ toys, melamine in animal feed) illustrates that many Chinese manufacturers rely on second and third tier suppliers with little QC oversight of those vendors. I suspect that concepts like QS and ISO have not permeated throughout Chinese manufacturing. So while the ultimate manufacturer of a product might have developed-world level QC measures in their own facilities, they still depend on a supply chain that has little regard for quality. As you pointed out, yes many Chinese manufacturing facilities are brand spanking new with the latest technology, but there are still plenty of shops in China (and India) where the work is done by hand or with crude or obsolete equipment.

    BTW, a while back I saw an interview with a honcho at Bobby Bosch who said that due to quality and intellectual property concerns Bosch was very careful about what they built in their Chinese plants. There are technologies that they just don’t want to share with their JV partners.

    I don’t want to sound like a one-note Johnny, but it seems to me that ultimately the Chinese policy of forcing foreign manufacturers into JVs with Chinese partners is not a good idea.

    • 0 avatar

      Ronnie, a true “developed-world” QC system incorporates an evaluation and even auditing of all suppliers’ QC systems and their ability to track material should a batch quarantine become necessary. One of the key strategies that makes westernized quality control so good is the insistence on verifying your incoming quality through quality system assurance rather than inspections, to the point of surpassing “trust but verify” and nearing a “trust no one” attitude. If you’re not happy with a supplier’s QC system, find another supplier.

    • 0 avatar

      As someone who’s helping European and US companies source first rate product made in China, I am sick and tired of the lead-paint – poisoned drywall – Melamine dogfood – Cadmium baubles stories.

      All of them are the responsibility of the importer. If the importer doesn’t live up to that responsibility, then he deserves to be ruined by a scandal.

      The Chinese do what you tell them. If you give them tight specs, they stick with the specs. If you give them no specs and demand a low price alone, they will give you a low price at any cost.

      In my contracts, it says in bold letters “NO TOXIC SUBSTANCES”. The ingredients, metals etc are tightly specified. We have our own QA staff present during product runs, backed up by 3rd party auditors.

      If people buy on price alone, then they deserve the disasters. As cdotson and hreardon intimated, it’s a matter of QC. We demand working Quality Assurance Systems according to TS 16949, we check them, and we have them checked again by the likes of TUV etc. Before shipping, it’s checked again by a 3rd party. If it doesn’t pass, sorry, sell it to someone else.

      Having hard & fast ECE standards helps. The Europeans who have hard & fast standards usually get the good stuff, the Americans who have lax standards that rely on self certification get the crap.

      ECE, which is so opposed by many, involves initial assessment audits, it involves functioning COP (Conformity of Production) systems, it involves surprise audits that can be sprung on the manufacturer at any given time. If the quality system is not there, or if the product isn’t made as in the ECE application, the ECE certification must be pulled. In serious cases, all ECE certs can be pulled. Without the ECE cert, the product is illegal in the ECE countries that require them, and the manufacturer can close his doors. With the American system, the importer can close his doors.

      How many Made in China quality scandals to your hear from Europe? Next to none. How many from America? One a day.

      And one-note-Johnny, if the Chinese demand a JV for a car factory, then that’s their decision, it’s their country. A parts factory doesn’t need a JV. You are more than welcome to start China’s 2nd DSG clutch manufacturing company. Bring the money and the know-how, and I’ll help you set it up.

    • 0 avatar

      “All of them are the responsibility of the importer. If the importer doesn’t live up to that responsibility, then he deserves to be ruined by a scandal.

      The Chinese do what you tell them. If you give them tight specs, they stick with the specs. If you give them no specs and demand a low price alone, they will give you a low price at any cost.”


      It’s plenty of fun to post snark about Chinese products but the statements above are true. The Chinese don’t make crap just for its’ own sake. It’s primarily the importer’s fault in most cases and the quest for ever cheaper goods.. Chinese products can be extremely high quality and to dismiss them out of hand is a mistake.

    • 0 avatar

      Hmm, didn’t know Europe doesn’t have same quality problem with Chinese imports that America has. Do you have any good links? I’d like to read more on that.

  • avatar

    My guess is that VW is using the China fab as an assembly plant with all of the components shipped in from Europe.

    On the subject of QC: I recently had the great pleasure of sharing a flight home seated next to a German executive who spends half of his year in China. They sell highly sophisticated environmental controls. His take is that China is moving up the QC chain far, far quicker than most Western pundits are willing to give them credit for. His opinion is that China is within 5 years of matching QC on most automotive parts and assembly techniques, and within 7-10 years on most “sophisticated” electronics.

    Take it for what you will, but I tend to agree that we’re underestimating our esteemed competitors.

    • 0 avatar
      Brian E

      This should not be surprising. Anyone who has bought a computer or a cell phone in recent years has purchased hundreds or thousands of Chinese-sourced parts. I source batteries from China and it’s almost impossible to get them from anywhere else. Needless to say the quality is quite good. If I was looking for bad parts I could almost certainly find them from China too, but that would be pointless and probably dangerous.

  • avatar

    what’s with that diagram. you would think VW would at least translate the German to Chinese. talk about the responsibility of the importer . . .

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