Carrying VW's torch

This is a most memorable year for Winfried Vahland, president and CEO of Volkswagen Group China.

On Aug 6, not only did he run a leg of the Olympic torch relay in Beijing, but he was also lucky enough to pass the flame on to his wife Vahland Ingrid, an act the pair sealed with a kiss.

More important for the CEO, his company made a new sales record of 531,612 autos in the first half, a 23.3 percent rise over the past year, which makes Vahland confident about his 2008 target of 1 million units.

Thanks to his successful Olympic marketing, Volkswagen Group China presented a "big gift" to itself ahead of its 25th birthday in China. Enjoying living in China with his wife and cherishing his working experience in China, Vahland shares his views with China Business Weekly reporter Li Fangfang on China's 30 years of development and his company's part in it.

Q: What's the biggest challenge for you and your company in the China market?

A: When I first came to China, my biggest challenge was how to stop our free-fall drop in the market share and regain our position as the market leader. We launched the "Olympic Restructure Program" in 2005. Three years later, I am very happy and proud to tell people that we've already reached our target successfully.

Thirty years ago, Volkswagen entered China with lots of risks. We needed to build up the groundwork of parts manufacturing in terms of international standards, and also needed to maintain the quality standard of the product. We also needed to reach the target of localization rate on time according to the set schedule. To reach this target, we set up a parts supply chain and began training staff members to develop skilled and qualified workers. They were trained by retired German experts who were invited to China for a know-how transfer.

Q: What's your comment on your company's development in China and what's China's significance for Volkswagen?

A: China's territory is huge. Every regional market has different features. It's a challenge to automakers from abroad. However, we have two great Chinese partners (SAIC and FAW), who have helped us greatly in adapting with the Chinese market. They have helped us to know Chinese consumers and markets deeply.

We firmly believed China would provide Volkswagen a unique opportunity in our strategic development. Rooting ourselves in China has proven to be one of our best strategic moves.

Q: As president of a multinational company's China operations, what is your view on China's 30 years' of reform and opening?

A: It's a very foresighted policy, which promised China such a bright future. Thirty years ago, China's leaders intelligently opened the country. Reform and opening was the beginning of China's speedy development.

The development of the automotive industry is one of the most rapid among industries. Volkswagen has been very lucky to grow up in China with its two joint ventures.

Q: What's your comment on China's huge changes in the past years?

A: Since my first visit to China in 1993, I find it so impressive that no matter how often I visit a place in China, there are always lots of changes. I never have doubts about China's future, since the country is so dynamic and its people are so intelligent and diligent.

(China Daily 11/03/2008 page6)