Jürgen Stackmann, Member of the Board of Management with responsibility for “Sales, Marketing and After Sales”, smiles. “I think it is really exciting to help bring a new brand into the world. This is definitely not an everyday occurrence,” he tells a group of international business journalists making a media visit in Wolfsburg. The visit is organized to discuss the creation of the new JETTA brand, an idea that Volkswagen plans to introduce in China as a way of attracting the growing target group of young, middle-class customers and of better tapping its market potential.
“With JETTA, we will close a gap in China between the established VW lead brand in the upper volume segment and entry-level mobility, something that makes up about one-third of the Chinese market and serves local brands above all,” says Stackmann. JETTA will focus on young, first-time buyers while the Volkswagen umbrella brand sharpens its “top of volume” profile, he adds. “This will enable us to really expand our market coverage.”.
Huge metropolitan areas offer great potential
The vehicle population in many Chinese cities with more than 1 million residents is much lower than it is in metropolitan areas like Beijing and Shanghai. It frequently totals fewer than 100 cars per 1,000 residents. At the same time, China’s constantly expanding middle class aspires to individual mobility and its very first car. “We are talking about young, confident and family-oriented people who are between 25 and 35 years old as well as modern and open-minded. These are people who live a lifestyle that is based on practicality and emotional self-fulfillment,” says Stackmann.
Eight-one percent of all vehicles sold in China’s entry-level segment are sold to customers who are buying a car for the first time in their lives. JETTA appeals to this target group by offering high quality, safety, emotionality, stable value and a fresh design. JETTA will not be an economy brand, Stackmann stresses. “Given all of its features, we will deliberately position the new brand above China’s average entry-level price of €5,000 to €6,000.”
“With JETTA, the company is opening the Volkswagen world to first-time Chinese customers”, says Stephan Wöllenstein, CEO of the Volkswagen brand in China. “The core of the new brand will contain Volkswagen’s very own DNA and will provide consumers with advanced technology that meets their needs and fits to their lifestyles.”
The model range of JETTA will be produced by FAW-Volkswagen in Chengdu. It will comprise a sedan and two SUVs. Market data show that SUV models in particular are becoming increasingly popular. Sedans continue to be good sellers. But the SUV segment is generating tremendous growth momentum and now makes up nearly 50 percent of the entire market.
The sales launch of JETTA is scheduled for the third quarter of this year. The product line is being developed jointly with FAW-Volkswagen. By taking this approach, Volkswagen is also giving a further boost to regionalization.
Innovative sales and JETTA’s own dealer network
The company is taking new approaches in sales. JETTA is creating its own dealer network and will use innovative sales formats to directly appeal to its customers — with digitalized showrooms, activities in shopping malls and mobile sales trucks. About 200 dealers are to offer the new brand by the end of the year.
The name is closely tied to the success story of the Jetta in China. “It brought mobility to the masses, just as the Beetle did in Europe,” says Stackmann. “The Jetta put China on four wheels and is one of the most popular Volkswagen models in China. I am not exaggerating when I describe it as an icon.” For nearly 30 years, the Jetta has stood for quality, reliability and safety in China, he adds. “It has achieved an unparalleled level of consumer confidence. The Chinese view the Jetta as the reachable dream of a better life.” JETTA is the first Volkswagen brand to arise from a model.
No. 1 in the world’s largest market
The Volkswagen brand delivered 3.1 million vehicles to customers in China last year. In the process, the company gained market share in a declining market. China is Volkswagen’s largest individual market with a share of nearly 50 percent of global deliveries.
Volkswagen has ranked No. 1 there ever since it entered the Chinese market 30 years ago. Today, China is not just the world’s largest automotive market. The country is also on the cutting edge of the largest transformation that the automotive industry has ever seen. The country is one of the pacesetters for electromobility, digitalization, connectivity and autonomous driving.