China is Volkswagen's most important market worldwide. On the 70th anniversary of the foundation of the People's Republic, Herbert Diess, CEO of the Volkswagen Group, speaks about the country's development, its future prospects and Volkswagen's role in the Chinese mobility market.
Interview with Herbert Diess, CEO of the Volkswagen Group
This year marks the 70th anniversary of the founding of the People's Republic of China. Where do you see China economically today?
The development of China in the past 70 years is impressive. Last year China’s GDP reached 13.6 trillion dollars and established itself as the second biggest economy in the world. The middle-income group in China expanded to more than 400 million people and there are almost ten times more university students now than 20 years ago.
Following this, we are pleased to see a fast-growing Chinese customer group – they are getting younger, well-educated and more and more independent. Creating a perspective for a better life for so many million people in such short time is an absolutely unique achievement in mankind’s history.
What economic opportunities have arisen for Volkswagen in China in recent decades?
Looking at 40 years ago, with the start of the Reform and Opening-up policy, the first connections were secured between the Volkswagen Group and China. As a pioneering foreign automotive company, Volkswagen helped to put China on wheels. We started local production with our trusted Chinese partners SAIC and FAW. Nowadays, we not only have a third joint venture with JAC, but due to the excellent cooperation with our Chinese partners, we are still by far the leading car manufacturer in China. Right now, more than 35 million Chinese customers drive a Volkswagen Group’s car. Last year alone, we delivered 4.21 million cars to Chinese customers.
Unilateralism and trade protectionism are increasing, and the global economy is facing major challenges. What role can China play in the further development of the global economy?
As automotive technologies and services spread from China to the rest of the world, we appreciate and support globalized fair trade and multilateral commerce. Experience has shown that unilateral protectionism helps no one in the long-term. Historically speaking, globalization was what provided the Volkswagen Group the chance to be in the leading position in the Chinese automotive market. Our company stands for a globalized world with over 650.000 employees, over 100.000 of them in China. Over one fourth of the Volkswagen Group’s plants are located in China.
How do you assess the future prospects of the Chinese economy?
We are very confident in its positive future prospects and especially in the development of the automotive market. For the world of mobility, the Chinese car market will be the automotive powerhouse. Future technologies and trends such as e-mobility or autonomous driving will spread from China to the entire world and will influence global mobility.
With that in mind, we will further strengthen our local R&D competencies for future products or services. Through our comprehensive “ONE R&D” strategy, we aim to combine all of our R&D capabilities together to develop for the entire Group, China and the rest of the world. Over 4,200 of our R&D experts are working on the mobility of tomorrow. To enhance this research effort, we are also cooperating with strong Chinese partners.
The Volkswagen Group in China
The Chinese automotive market plays a special role at the Volkswagen Group. In 2018, the Group’s brands sold more than 4.2 million vehicles there. But China is more than Volkswagen’s second domestic market. And the massive electric offensive under way there, the even more intense localization effort and the new Volkswagen Group Future Center in Beijing – one of three locations worldwide – serve to demonstrate that fact.