Volkswagen confident despite emissions scandal

Carmaker plans for a successful and sustainable future in China

Volkswagen will not cut investment in China despite the embattled German carmaker reporting losses after the emissions scandal in the United States.

The BBC reported that Volkswagen registered an operating loss of 3.48 billion euros ($3.8 billion) for the third quarter of the year and a pre-tax loss of 2.52 billion euros.

"Volkswagen will absolutely stay with its Chinese investment programs. We are really confident about the future," said Jochem Heizmann, president and CEO of Volkswagen Group China.

Earlier this year, Volkswagen Group China released plans that said it is investing 22 billion euros along with its two joint ventures -FAW-Volkswagen and Shanghai Volkswagen - in China, its largest market since 2009.

As one of the earliest foreign carmakers with local production, Volkswagen has 30 plants to produce vehicles and components in a number of Chinese cities.

The automaker sold 2.58 million cars in China in the first nine months of this year, a slight fall from the same period last year, but said it is optimistic about the market.

"If you look at the first half of the year, among the top 10 selling models in China, six were from Volkswagen," said Heizmann.

"And we are quite confident that in the medium and long-term, the Chinese automotive industry, especially in business growth, will be higher than any other relevant automotive markets."

Volkswagen said it is taking the emission scandal seriously in China although there are not many diesel-engine cars sold in the Chinese market.

In October it issued a recall plan for the 1,950 such vehicles sold in the country, which have similar problems to those in the US.

"Sometimes it happens that you may have quality questions. The important thing is to recognize this as early as possible and react in the right way to serve the customers," said Heizmann.

"In China we remain firmly focused on our customers. We are concentrating on introducing a lot of new products in China. We are committed without any doubts."

Volkswagen plans to introduce more SUVs into the Chinese market in the next few years, which have remained popular in China this year despite its auto market's overall slowdown.

The automaker will produce new-energy vehicles in the country starting from 2016. Volkswagen said at this year's Shanghai auto show that it would locally produce more than 15 different models of plug-in hybrids or fully battery-powered cars in four years.

"We are confident the market will continue to grow. We will continue to offer our customers the right, environmentally friendly products," said Heizmann.

He said customer satisfaction always comes first at Volkswagen and that a key part of its China strategy is "people come first", also a theme of its corporate responsibility projects.

That is why, among others, Volkswagen has been involved in cultural and educational programs.

"Culture has a lot to do with education, with attitude," said Heizmann when he spoke of the Rain Room Volkswagen sponsored two months ago in Shanghai, enabling more people to have access to the innovative art installation.

He said the artwork by Random International also started the "Volkswagen Culture Wave", a China-specific cultural engagement program aimed at making art and culture accessible to the public at large to nurture creativity and innovation.

"At Volkswagen, we believe art and culture are fundamental elements of a dynamic society, inspiring design, innovation and creativity," he said.

Another initiative this year is a football program for kindergarten children in Beijing, which is designed to build a football culture among younger generations, as "they are the future of China", said Heizmann.

The grandfather of two proposed the child safety seats program in 2013 and Volkswagen has since been working with its joint ventures to promote the importance of using them in cars.

In 2015, the automaker is promoting child safety through the initiative in many cities across the country via road shows and seat donations.

Heizmann said what matters is not how many seats were donated, but to raise the awareness of parents, to make them to know how dangerous it is not to use child safety seats when driving in the car with their children.

Statistics show that those who use child safety seats account for just 1 percent of the total children in cars in China as opposed to above 90 percent in Europe and North America. Experts say it will take years to increase the figure to 30 percent in China.

"We have been in China for 30 years. We played an important role in developing the Chinese automotive business. And we plan to continue playing that role and being responsible for the next generation of automotive development in the country," said Heizmann.

"If you ask what my dream is, my dream is to prepare Volkswagen for a sustainable and successful future in China."

lifusheng@chinadaily.com.cn

(China Daily 11/02/2015 page18)