volkswagen brand in china - biu · pdf fileutilization of tsi+dsg and ea 888 ... production of...

Weiming Soh

Executive Vice President of Volkswagen Group ChinaSales and Marketing

Volkswagen Brand in China

Sales Performance and Outlook

Marketing Campaigns and New Model Launch

Network

Strategy

Training Strategy and Customer Satisfaction Programs

BlueMotionTechnologies

and Think Blue Campaign

Volkswagen Brand China Investor Conference 2010 in Beijing

China has been the key region for the Volkswagen Brand worldwide for decades

Source: Volkswagen Group; Global Insight

CY2009

US

China

Germany

Japan

1%

16%

33%

16%

5%

1%

17%

14%28%

34%

2%

26%

5%

0%

9%

33%

Rest of

Europe

26% 9%23% 12%

Regional distribution of deliveries to customers by brand

Toyota Ford Honda

Passenger Car Market WorldwideJan -March, 2010

Volkswagen Brand WorldwideJan -March, 2010

Now, China is the largest market for the Volkswagen Brand worldwide

13% Brazil

Source: Volkswagen Group; based on deliveries to customers

Mature markets 53%

19%

Mature markets 71%

4% Brazil

China

2% Russia 4% India

33%China

0.2% India1% Russia

2009 was a year of “Records”

for the Volkswagen Brand and 2010 is aiming for a new height

2005 2006 2007 2008 20102009

844781

629511

≥ Market Growth

Remark: Sales forecast is based on PO target (10 million total market forecast)

Deliveries to customers

‘000 Units

1,118

In Q1 2010, Volkswagen Brand also secured its leading market share position on the Chinese Mainland

Market Share by Brand % (Jan-Mar 2010)

BYD

Nissan

Honda

Toyota

Hyundai

2 Toyota 6.0% 7.7%

4 Nissan 5.8% 6.4%

3 Honda 6.0% 6.7%

5 BYD 5.7% 5.1%

6 Chevrolet 5.1% 3.9%

7 Hyundai 4.7% 6.8%

8 Buick 4.5% 5.3%

9 Chery 3.4% 4.6%

10 Suzuki 2.9% 2.7%

Others 42.2% 37.5%

YTD MS % YTD MS %Ranking Brand

VolkswagenVolkswagen

Buick

Suzuki

Chery

Others

Audi 1.9% 1.9%

Skoda 1.6% 1.4%

Jan-Mar 10 2009

13.7% 13.2%

Chevrolet

Source: Volkswagen Group China; excl. LCVs

1

2007 2008 2009

Santana Jetta

2007 2008 2009 2010

The latest new models have dramatically improved the image of the Volkswagen Brand in the past few years

Sales of Shanghai Volkswagen Sales of FAW-Volkswagen

2010

60%55%

Old models New models

72%80%

56%60%

67% 72%

+Lavida +Golf A6+New Bora+NewPassat LY

+ Tiguan +CC+Touran + Sagitar+ Magotan

Source: Volkswagen Group ChinaRemarks: Average share of old models of SVW and FAW-VW is 24% in Y2010

SVW delivered 568,071 Volkswagen Brand cars in 2009, up 29%

2009

2010

No. 1 sales in China 2009

Passat Lingyu

sales volume > 100,000 units

Polo sales volume > 100,000 units

Utilization of TSI+DSG and EA 888 engine technology

Tiguan LWB launch

Sales

Lavida Santana/Vista

Passat Polo

2009

Touran

Source: Volkswagen Group China

FAW-VW delivered 527,670 Volkswagen Brand cars in 2009, up 35%

2009

2010

Magotan


Sagitar


Golf A6 successfully launched, 60% of which are TSI+DSG models

Launch of Golf GTI and CC

Volume breakthrough on Magotan

1.4 TSI+DSG

Sales

Jetta New Bora

Sagitar Magotan Golf A6

2009


Volkswagen Import Company (VICo) in China is young, but has great potential

645 2,026 5,015 7,850

11,108

Target

20,162

VolkswagenWorldwide Target

Hungary Czech PolandIndia

Sales volumeas today’s: AustriaUkraine RussiaJapan

Phaeton

Touareg

Scirocco

No. 1

No. 1

No. 2New Beetle

No. 2

Business Startup Accelerate GrowthIndividual, Motorsports, Bluemotion

Infrastructure SetupNetwork, Training, Process, etc.

2004 2005 2006 2007 2008 2009 2010 2011 2012


Mercedes-

Benz

BMW Lexus Audi VolvoPorsche Bentley Lamborghini

6,937

17,998

7,448

20,811

13,676

6,898

1,69183 175 11 35

Jan

–

Mar 2009

Jan

–

Mar 2010

+159% +179% +283% +145% +193% +78% +111% +218%

2,8112,020

4,954

3,567

3,590

+224%+224%

Volkswagen

3,0833,083

9,9769,976


Total Import Market +116%

Volkswagen Import China (VICo) has achieved a remarkable growth among the key competitors

By March 2010, Volkswagen Hong Kong reached 10.5% market share (cumulative)

VWHKestablished

4.5% 4.3% 5.5%

7 76

5

2006 2007 2008 2009 2010

9.1%

19.9%

13.2%

11.2%

10.1%

6.1%

4.9%

3.9%

2.6%

Jan-Mar, 2010

10.5%

10.5%

Volkswagen BrandMarket Share in Jan-Mar, 2010

Strategic Challenge forVolkswagen Brand m/s

%


Volkswagen Brand MS in Q1 2010

Feb.Jan. Mar.

7.5%

11.2% 12.7%

Competitor 1

Competitor 2

Competitor 3

Competitor 4

Competitor 5

Competitor 6

Competitor 7

The first worldwide VW city showroom, and the biggest showroom in Hong Kong

Largest Test Drive Initiative ever in Hong KongAggressive marketing strategy

(e.g. Taxi advertisement)

State-of-the-art workshop facility in Tsuen

Wan

Volkswagen Brand made integrated efforts to strengthen its presence in Hong Kong




Network

Strategy





Volkswagen Motorsport swept China and scooped 1st and 2nd positions in Macau Grand Prix


Scirocco Cup Race of Champion Grand Prix F3 Race

Successful TSI+DSG promotion provided a solid foundation to accelerate sales in 2010

Dalian VWED (TSI factory) & Shanghai VWATD (DSG factory)/VWPT (TSI factory)

2009 Event : Discover Volkswagen TSI+DSG in Dalian & Shanghai

Display of cut-away engines

1.4TSI, 1.8TSI and 2.0TSI,

7-DSG and 6-DSG exponentsFull product-line

Factory tour with expertsFirst time visit of VWATD (Dalian) Introduction of TSI+DSG product knowledge & competitive advantages

Test drive with integration of

“200 m Acceleration Game”

to experience power of the engines“Fuel Duel”

game to promote

“minimum fuel consumption”

“TOUCH”“SEE” “FEEL”

“Start of Production”

ceremony on May, 11th, 2010 Dalian factory will produce 300,000Units of 7-speed DSG transmission every year and gradually expand to capacity of 600,000

2010 Event : Production of DSG started in Volkswagen Automatic Transmission Factory in Dalian


In 2010, the Volkswagen Brand will launch 9 new models/series including CKD and FBU imports

R and R-line models New Phaeton New Touareg /Hybrid

NewPhaeton Oct

Beijing Motor Show

R Strategy

NewTouaregFebJan May CCGTI SepTiguan

LWBJetta A2 FL

Golf GTI Jetta A2 FL Tiguan CC




Network

Strategy





Strategic dealer network expansion plan to fulfill volume ambition

Volkswagen Brand dealer

network

expansion

plan


+200

2009 Future2010 (E)

+600>1,750

>1,150

+85%

950

Volkswagen Brand develops different dealership formats and master plan for China


4S Dealership (Umbrella Facelift) 4S Dealership (New Build)

City Showroom Phaeton Center 2nd Tier



Network

Strategy





Volkswagen Brand China will enhance the training infrastructure to meet future challenges

•

Individual Training Strategies

•

Individual Training Standards

•

Locally Developed Programs

Today Future

•

Build the industry leading Training Academy

•

Develop

Management Qualification

& Trainer Qualification

•

Implant Volkswagen Train-the-Trainer standard

& China TtT

certification program

•

National Training Strategies

•

International Volkswagen Standards

•

Localized International Programs

Current Strategy & Programs

Future Strategy & Programs Best Quality

No. 1 Customer Satisfaction

Top-of-mind

Brand Image

Top Performer Attraction/Retention


Customer Satisfaction China Major Programs 2010 Targets

Major programs have been identified to meet customer satisfaction target

Dealer operation standards and process & audit

Technical and no-technical training

Network development

Dealer commercial policy and incentive programs

Dealer support

457 491 544 592 642

154214 231 266

9590807050

1,978

1,7731,635

1,407

0

500

1,000

1,500

2,000

2,500

0

400

800

1,200

1,600

2,000

350

81

DealerNumber

Official Sales target

VICo

SVW 1st Tier Dealers

2013(E)

SVW 2nd Tier Dealers

FAW-VW

1,648

645

2012(E)

1,463

550

2011(E)

1,323

485

2010(E)

938

1,130

415

2009

Sales1

(‘000)

1,116

Top in Volume Brand


http://images.google.cn/imgres?imgurl=http://www.cardealermagazine.co.uk/publish/wp-content/uploads/2009/07/auto-trader-helps-car-dealers-value-stock.jpg&imgrefurl=http://www.cardealermagazine.co.uk/publish/tag/auto-trader&usg=__s6kTEZH7N-6Ky6vfIzDsYbcKT4A=&h=200&w=300&sz=26&hl=zh-CN&start=31&itbs=1&tbnid=OS1_IdrsgoAfYM:&tbnh=77&tbnw=116&prev=/images%3Fq%3Dauto%2Bdealer%2Bmargin%26start%3D18%26hl%3Dzh-CN%26newwindow%3D1%26sa%3DN%26ndsp%3D18%26tbs%3Disch:1



Network

Strategy





Volkswagen introduced BlueMotionTechnologies in China

Natural Resources(Oil, Gas)

Increaseefficiency

RenewableEnergies

TSIBlueMotion

Hybrid Fuel CellCNG TDI

DSGTwinDrive E-Drive


Natural Resources(Oil, Gas)

Increaseefficiency

RenewableEnergies

Comprehensive brand campaign of Think Blue is being launched in China starting from 2010 Beijing Auto show


Eco-Driving Promotion Advertisement

InternetAuto Show

Model Range Mobile Marketing

360°

Brand Campaign

Weiming Soh

Executive Vice President of Volkswagen Group ChinaSales and Marketing

Volkswagen Brand in China

DisclaimerThis presentation contains forward-looking statements and information on the business development of the Volkswagen Group. These statements may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will”

or words with similar meaning. These statements are based on assumptions relating to the development of the economies of individual countries, and in particular of the automotive industry, which we have made on the basis of the information available to us and which we consider to be realistic at the time of going to press. The estimates given involve a degree of risk, and the actual developments may differ from those forecast.

Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as in Western Europe (and especially Germany) or in the USA, Brazil or

China, will have a corresponding impact on the development of our business. The same applies in the event of a significant shift in current exchange rates relative to the US dollar, sterling, yen, Brazilian real, Chinese renminbi

and Czech koruna.

If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such statements.

We do not update forward-looking statements retrospectively. Such statements are valid on

the date of publication and can be superceded.

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