Volkswagen reportedly plans to introduce up to 12 new models in China by 2009 while cutting costs and improving service in hopes of regaining its eroding market share in the country.
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According to the Associated Press, the company’s new “Olympic plan” – so named because it emphasises teamwork and finishes in 2008, the year of the Beijing Summer Games – will increase product differentiation even as it boosts co-operation to reduce costs between its two Chinese joint venture partners.
The partners will centralise parts purchasing and power train development, VW said, according to the report. That should help lower local material costs.
AP noted that Volkswagen entered China 21 years ago, before its biggest competitors, and long dominated the market with its Santana and Audi models.
However, recent years have seen a slew of new competitors begin production in China and the German company has appeared slow to respond with more choices and better prices, quality and service. VW’s China operations also suffer from competition between its joint ventures for sales of the same models, the report added.
Facing intense competition, VW has seen its market share drop to 18%, from well over 50% in the 1990s.
The Associated Press said VW plans to add the Skoda brand to its Shanghai joint venture in 2007 and introduce its first new model specifically catering to Chinese tastes in November.
“Today we are in a transition phase where we are laying foundations preparing ourselves for a more sustainable development of our company in China,” said Winfried Vahland, president of Volkswagen Group China, told AP in a statement.
