VW hi-tech on pace to meet fuel reductions

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By Gong Zhengzheng and Zhang Ranran (China Daily)
Updated: 2009-11-02 08:42

Volkswagen Group is well on course to meeting the target it set in 2007 to slash the average fuel consumption of its China-made vehicles - a pace it plans to accelerate by locally producing VW's latest engine and transmission designs.

Winfried Vahland, president and CEO of Volkswagen Group China, said in an interview that average fuel consumption of its domestically produced cars declined by 17 percent this year from 2005, so the company will have "no problem" achieving its target of a 20 percent reduction in 2010.

Volkswagen has developed a "powertrain strategy" in China that is built around its latest TSI (turbocharged stratified injection) engines and DSG (double-shift gearbox) technologies.

The biggest passenger car producer in China will expand local production capacity of TSI engines and DSG transmissions to equip more of its fleet in the country and further cut fuel consumption, Vahland said.

He said Volkswagen will spend 7 billion yuan ($1 billion) to expand production capacity for the powertrain components as part of the group's 4 billion euro ($6 billion) investment in China between 2009 and 2011.

"To introduce our latest technologies into China and let them have price advantages (through local production) is our must-do goal to win in this market," Vahland said.

The TSI engine produces maximum torque in a wide rpm range with continuous and strong power, yet also consumes less fuel. The DSG offers drivers smoother and faster gear changes, more driving pleasure and lower fuel consumption.

Volkswagen's cars in China with the TSI engine and DSG transmission package consume 20 to 25 percent less fuel than comparable models from its competitors without the twin technologies, according to data from the company.

The group plans to almost double combined production capacity in China for its 1.4-liter, 1.8-liter and 2.0-liter TSI engines to 500,000 units annually next year with partners SAIC Motor Corp and FAW Group Corp, the top two auto groups in China.

The German carmaker's wholly owned plant in the northeastern city of Dalian will begin making VW's 7-speed DSG transmissions at the beginning of 2010. Its annual capacity will reach 300,000 units in 2011.

"We will also consider producing our 6-speed DSG transmissions in China in the future if there's market demand," Vahland said.

He said China sales of vehicles equipped with the TSI-DSG configuration will account for 20 percent of its overall sales in the country this year.

The figure will rise to 30 percent next year and 50 percent in 2012, he added.

Volkswagen Group's China sales surged by 37 percent year-on-year to 1.06 million cars in the first three quarters of this year, already surpassing the 1.02 million units sold in all of 2008.

Vahland predicted the carmaker's 2009 sales in China would grow by at least 30 percent from last year. He also said the group will reach its 2018 target of moving 2 million cars in China annually ahead of schedule.

The TSI and DSG technologies are already available on a range of Volkswagen's models in China, including the newly launched sixth-generation Golf, the Magotan and Sagitar made at its joint venture with FAW, as well as the Skoda Octavia and Superb produced at the group's joint venture with SAIC.

He said the venture with SAIC will launch a new Lavida compact sedan with a 1.4-liter TSI engine and DSG transmission during the Guangzhou motor show that starts on Nov 23.

At the end of this year, the tie-up with FAW will offer a new Bora compact sedan with both the engine and transmission, he said.

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