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BIZCHINA> Top Biz News
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Volkswagen's 'strategy 2018' drives sustainable future
By Li Fangfang (China Daily)
Updated: 2009-03-05 07:54 For the 2008 fiscal year, with a 4.5 percent increase in sales revenue to 113.8 billion euros, the Group's operating profit rose by 3.0 percent to 6.3 billion euros. "We met our target and surpassed our record results for 2007, even though conditions were tougher," Chairman of the Board of Management of Volkswagen AG, Martin Winterkorn, said yesterday. "The current year remains extremely difficult for the entire automotive industry. Our target is to perform better than the overall market," Winterkorn commented on future business. Last year, the company, the biggest European carmaker, released Mach 18 (Group Strategy 2018), a development plan for the Volkswagen brand globally that established the development direction of Volkswagen, with the ultimate goal of becoming a leader in the automobile industry worldwide. In November, it pushed forward a plus plan with focus on becoming an economic and environmental leader in the global automotive industry, which remains the central element of the Group Strategy 2018. For this reason, the Volkswagen AG Board of Management is intensifying efforts to continue with the successful realization of this ambitious project even in a difficult economic period. Based on Mach 18, "VGC's newly-launched Strategy 2018 is geared toward the current ongoing Chinese automobile market situation and is related to all brands and long-term business strategy in China in order to achieve the sustainable development of the company," said Vahland. "And we want to deliver a very clear message (by the strategy) that we at Volkswagen promise long-term development in China and will increase our investment in this market." Last year, Volkswagen sold 1.02 million vehicles in China - marking a year-on-year growth rate of 12.5 percent. This easily outstripped the 6.7 percent average increase for the whole industry - the smallest increase in a decade on account of growing concerns about the international financial situation. Total vehicle sales for 2008 were said to be around 9.4 million. Sales of the Volkswagen brand amounted to 844,491, up 8.2 percent from 780,784 units in 2007, including 12,649 imported vehicles. Audi delivered 119,598 vehicles to customers including 13,640 imported units, with a 17.3 percent jump. The sales of Skoda cars more than doubled to 59,284 from 27,325 units in 2007. The group also sold 518 Bentley cars, and 117 Lamborghini super sports cars in 2008. To achieve its double-sales target by 2018, Volkswagen is aiming to improve customer satisfaction and brand image through enhanced dealer networks and an upgraded service. It will double dealership numbers from 1,000 to 2,000. This expansion will coincide with improvements in dealership management aimed at creating the best customer service ethos in the Chinese automotive market. Volkswagen was one of the first overseas car manufacturers to venture into the Chinese market with a focus on developing a dedicated dealership network. During the past 25 years, VGC has seen its dealership sales grow from initial sales of 1,710 units in 1985 to current sales of more than 1 million cars per annum. Vahland also outlined his belief that the bulk of market growth will come from increased demand for passenger cars, especially in medium and small cities, where the presence of VGC is currently relatively weak. However, he also said the ambitious expansion plan never meant compromising on quality. The company's commitment to green issues was also paramount in its future plans in China. "We will continually optimize production in terms of production efficiency and product quality in order to maintain our leading position in the industry," said Vahland. The company also maintains a commitment to two of the company's existing initiatives - its "Powertrain" technology/customer service strategy and a wider policy of developing more environmentally-friendly cars. VGC remains committed to a 20 percent reduction in fleet consumption and emissions by 2010. The implementation of the Powertrain technology, Volkswagen's proprietary environmentally-friendly technology brand, has already made remarkable inroads in achieving these objectives. "So far, we have reduced the average fuel consumption of our automotive marques by 15 percent. Engine downsizing strategy is another sector we are focusing on. We are looking at not only reducing fuel consumption, but also at generating more power," said Vahland. VGC also has underscored its commitment to the environment through a series of highly successful initiatives throughout China. As well as the introduction of its Powertrain technology, it has sponsored a TV series on road safety, produced a green education campaign (entitled "Volkswagen's Green Future Environmental Protection Initiatives"), and launched both the Shanghai Volkswagen's Olympic Wish Woods Plan and the FAW-Volkswagen's Public Welfare Woods program. It also provided a "Green Fleet" to assist with the logistics of the 2008 Olympics. (For more biz stories, please visit Industries)
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