New China head: Hybrids the most feasible new-energy cars
As the world's biggest vehicle market faces mounting pressure from oil prices and pollution, German carmaker Volkswagen Group has vowed to bring its latest energy-saving technologies into China to consolidate its nearly three decades of leadership.
Related reading: VW appoints new president for China branch
In an exclusive interview with China Daily last week, Jochem Heizmann, Volkswagen board member and China chief, said the group will produce plug-in hybrid models in China within two to three years "at the latest" as a major part of its new technology campaign in the country.
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He stressed that Volkswagen will also make its advanced plug-in hybrid powertrain locally.
But he declined to reveal which models will be equipped with the technology or a sales target for its new energy cars in China.
Using the company's flexible module system for product development, Volkswagen is able to apply the plug-in hybrid powertrain in "a broad spectrum of models" in China, he said.
The strategy meets Chinese government plans to aggressively promote energy-saving vehicles, with the spotlight on purely electric and plug-in hybrid cars.
In July the government unveiled a blueprint that calls for cumulative sales of pure electric and plug-in hybrid vehicles in China to reach 500,000 units by 2015, and then 5 million units by 2020. The targets are backed by a range of incentive policies including subsidies for buyers and tax breaks for manufacturers.
A number of other global automakers and indigenous brands also plan to offer energy-saving vehicles in China following the government announcement to cash in on the nascent segment.
According to Heizmann, traffic congestion and cold weather could affect the range of pure-electric cars, so plug-in hybrid vehicles are more feasible in China and could take the bigger share in the mid and long term.
He added that the fuel efficiency of Volkswagen's full fleet of conventionally powered cars made in China has increased by 20 percent over the past few years, and the work will continue for even better results.
Volkswagen Group now has joint ventures in China with Shanghai-based SAIC Motor and FAW Group in the northeast. Last year it delivered 2.26 million vehicles in the country, more than a quarter of its global sales.
The German carmaker announced the appointment of Heizmann as president and CEO of China in June, which took effect on Sept 1, an unprecedented move for a board member of a major global carmaker to dedicate solely to China operations, indicating how important the Chinese market is in Volkswagen's bid to become the world's top carmaker by 2018.
'Central position'
"China is our largest single market and its importance will only continue. It is in a central position in our 2018 strategy to become the most successful carmaker economically and ecologically in the world," Heizmann said.
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 On Thursday, Volkswagen launched its all-new Beetle in China as an import. [Photo/China Daily] |
The 60-year-old industry veteran is no stranger to the country. He led the design and construction of almost every Volkswagen plant in China as an expert on production.
"I went to China in 1991 for the first time, and have been continuously watching the development of the country since," he said.
Despite a slowdown after explosive increases in 2009 and 2010, the Chinese passenger vehicle market will maintain an upward trend at an annual rate of 7 to 8 percent for the next three to five years, he said, adding that the company aims to keep ahead of average market growth.
In the first eight months this year, the company sold 1.74 million vehicles in China, up 17.9 percent from the same period last year. At the same time, the overall passenger vehicle market edged up by 8 percent, according to statistics of China Association of Automobile Manufacturers.
Betting on a continued boost in demand, Volkswagen is investing aggressively in China, introducing new models and building more capacity with its two joint ventures. The investment will total 14 billion euros ($18.15 billion) from 2012 to 2016, according to a company plan revealed last year.
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