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Volkswagen's 'strategy 2018' drives sustainable future

By Li Fangfang (China Daily)
Updated: 2009-03-05 07:54

Winfried Vahland (middle), president and CEO of VGC, together with Liu Jian (left), general manager of Shanghai Volkswagen and An Tiecheng (right), general manager of FAW-Volkswagen, release the company's new strategy with a long-term perspective to the Chinese market recently in Beijing.[China Daily]

Volkswagen AG is best known as the manufacturer of the iconic "Beetle", but its new claim to fame may be its recession-busting bid to boost production and increase market share in the already highly competitive Chinese automotive market.

Related readings:  Volkswagen set to double China sales  Volkswagen aims to double sales to 2 million by 2018  Volkswagen says China sales up 12.5% in 2008  VW sells more than 1 million vehicles in China in 2008

The German company has just unveiled ambitious plans to consolidate its position in China through both new marketing initiatives and a product development program tailored to the needs of the Chinese motorist.

The bold manifesto, released on Feb 26 with target of increasing annual vehicles sales from the current 1 million to 2 million as well enlarging its fleet by adding or renewing at least four models per year by 2018, will open a new chapter for the company's operations in China.

"We have launched Strategy 2018 in line with the long-term objectives of the Volkswagen Group in China. It follows on from the successful restructuring, in line with the Olympic Program, we adopted in the run-up to the 2008 Games," said Winfried Vahland, executive vice-president of the Volkswagen Group, and president and CEO of Volkswagen Group China (VGC).

According to Vahland, 2008 was an extraordinary year for the company and its two Chinese joint venture companies, Shanghai Volkswagen and FAW-Volkswagen: "We exceeded our three-year Olympic Program (2005-08) targets and achieved every objective identified in our 'Year of Striving for the Gold Medal' initiative. We also sold more than one million cars for the first time. These remarkable achievements have consolidated Volkswagen's dominant position in the Chinese auto market and have laid a solid foundation for VGC's continued growth."

As a result of the recession in the global economy , many auto manufacturers encountered an unexpected sales reduction last year and are now planning production and sales cutbacks to live through tough times in 2009. Some of them are even considering of shedding off unprofitable brands and assets.

"Although the global economy and automobile markets still face challenges, we remain fully confident in the long-term prosperity of China's automotive industry and of Volkswagen Group's future role as an industry leader in the country," said Vahland.

Vahland believes that Shanghai Volkswagen and FAW-Volkswagen, two powerful joint venture companies, can generate new win-win partnerships and achieve even greater success for VGC in the future, a concept VGC refers to as the "1+1>2" Philosophy (one plus one is greater than two).

"We recognize that the slowdown presents challenges. We have defined the plan to face these challenges and take advantage of all the opportunities on offer."

His confidence comes from the excellent sales performance Volkswagen Group achieved last year.

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