Blog: Dave LeggettVolkswagen in China

Dave Leggett | 13 April 2004

There can be little doubt that the number of planned new carmaking entrants in China means that market leader Volkswagen Group will be under a lot of pressure over the next five years. Market share will surely fall further, with some adverse impact on margins too as the market becomes less tight and supply to the market is ramped up further. I would imagine that in these circumstances, Volkswagen will be doing its utmost to spoil conditions for the new players. One strategy might be to churn out the cars from its Chinese plants, as many as possible, marketed very aggressively, with a view to keeping as much share as possible and maximising future VW replacement demand. Right now, a heavily discounted sale might be considered better than letting a competitor in. But then, that's not good for profits...


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