Shanghai VW: Torrid 2010, steady growth ahead

(China Daily)
Updated: 2011-01-31 15:47
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Shanghai VW: Torrid 2010, steady growth ahead

Shanghai VW: Torrid 2010, steady growth ahead

 The production line of Shanghai Volkswagen in Anting, Shanghai. [Photo / China Daily]

Editor's note: In a recent interview with China Daily, Joern Hasenfuss, deputy managing director & commercial executive director of Shanghai Volkswagen, talked about the company's growth in 2010 and its plans in the years to come. Han Tianyang reports from Shanghai:

Q: What was last year like for Shanghai Volkswagen?

A: Last year was full of opportunities as well as challenges for our joint venture, and we've handed in a satisfying answer sheet.

In October 2010, Shanghai Volkswagen became the first carmaker in China to gain accumulative output of 6 million cars. To produce the first 1 million cars took us 13 years from 1984 to 1997, to realize the sixth 1 million we needed only a year.

About market performance - terminal sales reached more than 1,001,000 units in 2010, making us one of the first members of China's "one million club".

The VW brand made at our joint venture retained its crown as sales rose 30 percent to more than 800,000 cars last year. It was well ahead of all other brands by nearly 100,000 units.

Sales of Skoda, our second brand at Shanghai Volkswagen, exceeded 200,000 units, a year-on-year increase of 62 percent.

Q: Quality is one of the priorities influencing customers when they buy cars. What has Shanghai Volkswagen done to ensure quality control?

A: I think it is a very important issue. Customer satisfaction is behind this topic. We are committed to providing cars that meet the needs of Chinese consumers and are in line with international standards. "Quality first" is our avowed management philosophy.

Shanghai Volkswagen uses advanced technologies and techniques, and has established a comprehensive assessment system to ensure high quality in every link of the entire production chain.

According to results of the 2010 China Automotive Customer Satisfaction Index by the China Association for Quality, six cars made by Shanghai Volkswagen had "most satisfied" status among customers in their respective segments.

Also, our Skoda brand won second place in the Sales Satisfaction Index survey by JD Power last year.

Top employer

Q: Shanghai Volkswagen has just won its fifth "China's Top Employer" award. Could you please tell us about the company's training programs?

A: Yes, talent is the basis for the development of a company. The reason why Shanghai Volkswagen won the award mainly stems from our belief of "training employees is just like making cars". It can also be credited to our unique mechanisms for training, evaluation and encouragement.

Graduates are one of the main sources of talent for our company. Shanghai Volkswagen is looking for suitable talent through campus recruitment, school-enterprise cooperation programs, internships and other channels, which greatly shortens the adaptation and training time for new staff and improves the efficiency of creating a talent pool.

Graduates with sound character and professional knowledge all have the chance to work for our company even though they may not graduate from famous universities.

In 2010, Shanghai Volkswagen again implemented a young talent training program, the second time since 1998 our company sent excellent young engineers on such a large scale to participate in the whole vehicle development process at Volkswagen in Germany. The program not only provides a rare learning opportunity for young engineers, but also lays a solid foundation for Shanghai Volkswagen to enhance its capabilities in vehicle development.

Q: What's the role of the Skoda brand and what will Shanghai Volkswagen do to support its continued development?

A: The Skoda brand is a very important part of Shanghai Volkswagen's dual-brand strategy. With its development, Skoda has greatly contributed to Shanghai Volkswagen's product lineup, sales volume and sales network.

In the future, we will promote the steady and rapid development of Skoda, and continue to enhance the brand's market competitiveness. The proportion of Skoda sales in the company will further increase to 30 percent. Brand building will remain the focus of Skoda's work. The product lineup and network of dealers will continue to expand.

Q: When will Shanghai Volkswagen produce the Skoda SUV Yeti in China?

A: In December 2010, Shanghai Volkswagen and Skoda Auto signed an agreement to introduce and produce the Yeti in 2013.

The Yeti is an excellent SUV and we are confident that Chinese customers will like the model. More information will be released when appropriate.

Introduction of the Yeti will further improve the Skoda product line in China. By then we will have competitive Skoda models in the A0, A, B-class and SUV segments to comprehensively cover the Chinese auto market.

Development plans

Q: What are Shanghai Volkswagen's plans for this year and beyond?

A: We expect to continue increasing sales and market share, and enhance our competitiveness. At the same time we will promote our brand reputation and improve customer satisfaction.

The company has detailed plans for new products that will be introduced in the next five years. We will ensure that there will be new products on the market every year.

We will also continue dealer expansion and will pay more attention to second- and third-tier cities.

And we started a two-year internal strategy called "WIN! 2012" based on the Mach 18 strategy of VW AG, to further promote corporate culture compatible with the company's development strategy.

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Q: Why were Tiguan's sales figures in December was far less than November? When do you think strained production capacity can be eased?

A: Our production line underwent a regular exam and maintenance at the end of 2010, which may have affected production in the short term, but capacity for the Tiguan in 2011 will be further improved to better meet market demand.

Production and sales of the Tiguan both exceeded 70,000 in 2010, ahead of its peers. After taking a series of measures, tension in the Tiguan supply will be improved this year, especially in the second half.

Q: When will Shanghai Volkswagen launch the new model NMS? How is it different from the B7 produced at Volkswagen's joint venture with FAW Group?

A: You may think that the NMS is very similar to B7, since both are B-class sedans produced by Volkswagen, both with authentic German quality that meets the rigid global R&D standards of Volkswagen.

But from our point of view, the positioning of the two sedans is perfectly complementary, and they will together improve the market share of the VW brand in China.

Volkswagen launched the B1 in 1973 and then continued upgrading it over the next 40 years. It is now in its seventh generation. What FAW-VW will manufacture in China is just the domestic edition of the B7.

Based on a next-generation Volkswagen B-class platform, the NMS is a new and sophisticated sedan developed together by Volkswagen and the Shanghai joint venture, mainly targeting North America and China, the two largest markets with top growth potential.

The NMS will be launched as the successor of Passat in China and will have the responsibility of continuing that legend here.