A success story in the Middle Kingdom. The Volkswagen Group has been active in China for over 30 years, during which time it has developed this country into a second home market.
Whether sporting a grass-green metallic, sea blue or classic burgundy coating, the edgy Volkswagen Santana is still part of China’s urban landscape. Volkswagen China built four million units of the charismatic notchback saloon between 1983 and 2013. The VW Beetle or Bug may have been the icon of motorization in other parts of the world, but in China it is the Santana.
This model was the first fruit of the new collaboration between Volkswagen and the Shanghai Automotive Industry Corporation (SAIC), the largest state-owned Chinese automaker at the time. The first car rolled off the production line in Shanghai on April 11, 1983, followed by the new version in 2012. Thus, the Santana represents Volkswagen’s success story in China like no other model.
As early as the end of the 1970s, Volkswagen had become one of the first automakers to realize that China would slowly open itself to the west. Entering the market in the Far East would prove to be difficult, but the Wolfsburg-based company did not shy away from the challenge of being the first auto group not only to import into China but also to manufacture in-country in collaboration with local companies. The outgrowth of this was not just the joint venture with SAIC officially founded in 1985, but also the 1991 joint venture FAW Volkswagen, which would later build the Jetta – a car that was just as popular as the Santana.
“We were pioneers in China. Later, we were also the first to move into the deep west and the deep south, which sent out a signal in the developing markets.”
“We were pioneers in China,” emphasizes Prof. Dr. Jochem Heizmann, Board of Management member of the Volkswagen Group with responsibility for China, who went to China for the first time in 1991 as head of aggregates planning for the Volkswagen brand. “Later, we were also the first to move into the deep west and the deep south, which sent out a signal in the developing markets,” Professor Heizmann explained. In 1998, Volkswagen celebrated the production of its one millionth Santana, the success of which snowballed. In 2013, the two joint ventures together reported 18 million manufactured vehicles since the Volkswagen Group commenced production in China. More than three million vehicles were sold in China and Hong Kong in 2013 alone. Close ties had been formed over the years, said Heizmann, adding, “China has become a second home market for Volkswagen.” The step of establishing a separate Board of Management department for China in 2012 was pivotal, he said.
“It’s essential that decisions involving China be made in China.”
Even the name that the Wolfsburg-based company chose more than 30 years ago speaks volumes: Da Zhong or, in Chinese characters, 大众. The first character means “large”, the second “crowds” – words that every Chinese child knows. Today, the Volkswagen Group produces around one million cars each quarter from the Volkswagen, Audi and ŠKODA brands in 30 plants at 20 locations in China, and two more factories will be opened next year. The workforce now stands at 95,000 and is expected to reach as many as 120,000 the year after next because the Chinese market is already demanding 23 million cars per year and will see further growth.
Lamando, Sagitar and Magotan are the names of some of the successful models in China – names that mean little to people in Germany. The best-selling Volkswagen model in China is the Lavida, a compact four-door saloon. “China is still a nation of saloons,” explained Volkswagen’s China spokesman Christoph Ludewig. Even, so, customer demand for SUVs is growing steadily in line with the global trend.
“We will continue this development and make Volkswagen even more Chinese than it already is.”
From China, Volkswagen also intends to play an active part in the next global trend. After all, the growth of megacities with the resulting environmental impacts and driving bans anticipated international developments, said Heizmann. “This is why we are preparing to manufacture 400,000 electro hybrids and battery-operated vehicles per year from 2020.” The number of what are known as new energy vehicles would then rise to 1.5 million by 2025, he added. This year alone, Volkswagen Group China is planning to invest around €4 billion in the country in conjunction with its partners. The Group will roll out around 30 new models and variants in the current year. Volkswagen Group China is already very Chinese, admits China CEO Heizmann, predicting, “We will continue this development and make Volkswagen even more Chinese than it already is.”
Volkswagen in China – a journey through time
China allows Volkswagen cars to be assembled on the mainland
The first Chinese Santana rolls off the production line on April 11
Establishment of the first joint venture, “Shanghai-Volkswagen Automotive Company Ltd.” (SAIC Volkswagen)
Foundation of the second partner company, “First Automotive Works-Volkswagen Automobile Co., Ltd.” (FAW Volkswagen)
Production of the one millionth Volkswagen Santana
Volkswagen celebrates one million cars sold in the Chinese market
Jochem Heizmann is appointed as the first Board of Management member of the Volkswagen Group with responsibility for China
The joint ventures report 18 million vehicles produced since formation
Volkswagen China will produce around one million cars per quarter, invest approximately €4 billion and has announced production of 400,000 cars with alternative drive systems for 2020
Stories from Shanghai
Auto Shanghai 2017 will be held from April 19 to 28. We report news from the internationally renowned trade fair at www.volkswagenag.com.
Details for consumption and CO2 emissions are only mentioned for products of the German passenger car market.