volkswagen group china · 2020. 9. 24. · 2004: founding of volkswagen group china for...

Volkswagen Group ChinaDr. Jörg Mull, Executive Vice President, Finance

J.P. Morgan Investor Meeting, BeijingJune 05th, 2014

Business Overview and Sales Performance

Market Development

Investments Volkswagen Group China

Driven by Design and Technology

Financial results, challenges and opportunities

2

Content

Introduction of Volkswagen Group China (VGC)

Volkswagen production facilities in China History

1985: Founding of Shanghai Volkswagen Automotive Co. (SVW) as joint venture with Shanghai Automotive Industrial Corporation (SAIC). 10 million vehicles produced as of November 2013.

1991: Founding of FAW-Volkswagen Automotive Co. Ltd. (FAW-VW) as second joint venture with First Automotive Work (FAW). 8 million vehicles produced as of end 2013.

2004: Founding of Volkswagen Group China for coordination and management of activities of Volkswagen Group within China.

Total Investments 1985-2013Planned Investments 2014-2018Employees 2014

€ 18.5 Billion€ 18.2 Billion

89,000

Volkswagen Transmission

Shanghai VolkswagenPowertrain

FAW-Volkswagen(Volkswagen, Audi)

Volkswagen FAW Engine

Volkswagen FAW Platform

Shanghai Volkswagen

Shanghai Volkswagen(Volkswagen, ŠKODA)

Volkswagen AutomaticTransmission Dalian

Volkswagen China Investment Company

Beijing

Shanghai

Dalian

Chengdu Nanjing

FAW-Volkswagen

Car production plants

Component plants

Headquarter Volkswagen Group China

3

Yizheng


Urumqi

Shanghai Volkswagen

Foshan

FAW-Volkswagen

TianjinVolkswagen AutomaticTransmission Tianjin

Shanghai Volkswagen

Ningbo

Changchun

Volkswagen FAW Engine


ChangzhouMAN Diesel & Turbo

Successful partnership with FAW and SAIC

4

FAW 60%, VW AG 30%, AUDI AG 10%Share

1,524,000 unitsDeliveries 2013

1991Foundation

Volkswagen

Sagitar Magotan

Audi

Audi A6L

Audi A3 SB

Audi Q5Audi Q3

Golf

Jetta

CC

Audi A4L

New Bora

SAIC Motor 50%, VW AG 50%

Volksw

agen

Santana Passat

Škoda

Fabia

Rapid

OctaviaSuperb

Touran

Tiguan

LavidaPolo

Share

1,531,000 unitsDeliveries 2013

1985Foundation

Yeti

Gran Lavida

Rapid SB

Deliveries of Volkswagen in China in January - April 2014

51) incl. Hongkong, excl. MAN, Scania, and Ducati. All figures shown are rounded, so minor discrepancies may arise from addition of these amounts.

Ʃ 1,117Ʃ 1,117

VW Group: 73

Locally Produced(‘000 Units)

Import FBU(‘000 Units)

FAW-VW

SVW

Total Deliveries Region China 1,1901)

544

573

Deliveries to customers by brand in January - April 2014

700

100

1,100

0

400

1,000

900

800

1,200

600

500

300

200 +12.4%

+17.0%

1312

+7.9%

78170142

921

84

1,190

1,017

+19.9%

+17.5%

784

2014 Jan-Apr

2013 Jan-Apr

6

All brands contributed with a solid sales performance in Jan-Apr 2014 to the strong growth of Volkswagen Group China y-o-y

1) incl. Hongkong, excl. MAN, Scania and Ducati.

(‘000 Units)

Rank Brand/GroupChanges of

market share(YTD)*

1 Volkswagen Group + 0.9%

2 Competitor 1 - 0.1%

3 Competitor 2 - 1.0%

4 Competitor 3 + 1.0%

5 Competitor 4 + 0.3%

21%

10%

10%

6%5%

29%

Volkswagen Group leading the Passenger Vehicle Market

7

Comp.3Comp.4

Comp.2

Comp.1

Volkswagen GroupOthers(i.e. localbrands)

* Compared to last Year YTD

China Passenger Vehicle Market (Jan-Apr 2014 YTD)


Market Development




8

Content

9* Deutsche Bank March/April 2014

** Minimum GDP growth requirement of the Chinese Government

Due to the stabilization of the economic growth in Europe and the US, Chinese exports are expected to increase. Furthermore, the new growth model focuses more on domestic consumption, hence private consumption is likely to increasein 2014. Both should contribute to a stable economic development in China.

7.77.7

9.2

10.3

0

1

2

3

4

5

6

7

8

9

10

11

GDP (YoY%)

2015E

8.0*

2014E

7.8*

7.5**

2013201220112010

Chinese economy on a path of stable growth

7.78.4 8.77.7

02468

10

Consumption (YoY%)

2014E

7.0*8.1*

20132012

GovernmentPrivate

6.5

2.8

8.5

3.7

02468

1012

Import/Export (YoY%)

10.0*

2014E

11.0*

20132012

ImportExport

Current 5-year-plan: New growth model with focus on domestic market

11th 5-year-plan 2006-2010 12th 5-year-plan 2011-2015

Multi-National-Companies and infrastructure projects as growth generatorBig growth in manufacturing tradeJobs in cities to keep unemployment lowInternationally comparable price stability and well-adjusted foreign trade balance

Domestic consumption as growth acceleratorMegacities as growth generator Focus on environmental protection and energy efficiencyEncouragement of Chinese innovationsSocial stability due to balanced allocation of prosperity Selective policies for foreign investment as well as globalization of Chinese companies

Past:Focus on export and quantitative growth

Now:Focus on domestic market and qualitative growth

10

Sales of passenger vehicles accelerated again in 2013

11

Total Passenger Car Market – China (incl. HK)(‘000 Units)

Data Source: Volkswagen Group China / IHS Global Insight

11.457

2.266

13.537

2011

12.388

2003 20102009

8.482

2008

+9%

+18%

5.503

+8%

+54%

CAGR +19%

+35%

20132012

15.947

Restrictive policies for new car sales in developed Eastern Megacities

12

pAccording to CAAM*, there are 6 more cities which will implement restriction policies; Chengdu and Shijiazhuang could issue restrictive policies in 2014.* China Association of Automobile Manufacturers

Quota (2014)

Zhejiang

Heilongjiang

Jilin

Hebei Tianjin

Shandong

Hainan

Shanghai

Yunnan

Sichuan

Shaanxi Gansu Qinghai

Xinjiang

Tibet

Henan

Anhui

Jiangsu

Jiangxi Fujian

Hunan

Hubei

Inner Mongolia

Shanxi

Guangxi

Ningxia

Chongqing

Guizhou

Beijing:150k cars/year

Tianjin:~ 100k cars/yearBeijing

Shanghai:~ 100k cars/year

(not fixed)

Hangzhou:80k cars/year

Guangzhou:120k cars/year

Guangdong

Liaoning

GDP Growth development is expected to differentiate more strongly between the various Chinese regions

13Data Source: Provincial Government Report / Regional Government Media

Zhejiang

Heilongjiang

Jilin

Liaoning

Hebei Tianjin

Shandong

Guangdong

Hainan

Beijing

Shanghai

Yunnan

Sichuan

Shaanxi Gansu Qinghai

Xinjiang

GDP Growth 2013 YoY12-15%

10-12%

7-10%

Tibet

Henan

Anhui

Jiangsu

Jiangxi Fujian

Hunan

Hubei

Inner Mongolia

Shanxi

Guangxi

Ningxia

Chongqing

Guizhou

Province2013 YoY GDP Gr. %

2013 YoY GDP (Billion RMB)

Tianjin 12.5 1,437Guizhou 12.5 801Chongqing 12.3 1,266Yunnan 12.1 1,172Tibet 12.1 81Fujian 11 2,176Shaanxi 11 1,605Xinjiang 11 836Gansu 10.8 627Qinghai 10.8 210Anhui 10.4 1,904Guangxi 10.2 1,438Jiangxi 10.1 1,434Hubei 10.1 2,467Hunan 10.1 2,450Sichuan 10 2,626Hainan 9.9 315Ningxia 9.8 257Jiangsu 9.6 5,916Shandong 9.6 5,468Innermogolia 9 1,683Henan 9 3,216Shanxi 8.9 1,260Liaoning 8.7 2,708Guangdong 8.5 6,216Jilin 8.3 1,298Hebei 8.2 2,830Zhejiang 8.2 3,757Heilongjiang 8 1,438Beijing 7.7 1,950Shanghai 7.7 2,160

12th 5-year-plan 2011-2015

14

Low vehicle density in Level III and IV cities in China

ᴓ cars/1,000inhabitants

Number of cities

Level I citiesLevel I cities Level II citiesLevel II cities Level III citiesLevel III cities Level IV citiesLevel IV cities

BeijingShanghai

Guangzhou…

DalianXi´an

Changsha…

ShantouHengshui

Jingdezhen…

GuyuanYaan

Zhangyue…

9 26 68 109

11995

62

29

16.7 8.4 4.9 4.0ᴓAverage # of

inhabitants (m)

Content


Market Development




15

Go West and Go South Strategy for further growth

Existing vehicle production site

Planned vehicle production site

Urumqi

Chengdu

Changchun

NanjingYizheng

Shanghai

Ningbo

Foshan

Beijing

“Go South Strategy”

“Go West Strategy”

16

Changsha

Changchun Changchun Changchun

Chengdu Chengdu ChengduFoshanFoshan

FoshanShanghai

Shanghai

Shanghai

Nanjing

Nanjing

Nanjing

Yizheng

Yizheng

Yizheng

Ningbo

Ningbo

Ningbo

Urumqi

Urumqi

Urumqi

Changsha

Changsha

3.135 Mio

2013Production

2013Capacity

2015Capacity

2018Capacity

Upward flexibility

Capacity expansion plans – on the way to 4 million units in 2018Standard capacity of 250 working days

17

4 Million units

Capacity expansion plans are based on certain assumptions for the development of unit sales growth, upward flexibility (e.g. additional working days) and downward flexibility (e.g. postponement of expansion steps) are given.

FAW-VW

SVW

Urumqi

Chengdu

Changchun

Yizheng

Shanghai

Foshan

Beijing

Ningbo

Existing MQB production sitePlanned MQB production site

Nanjing

Changsha

Existing production site

Implementation of MQB*) toolkit in Chinese production network

18

Octavia

*) MQB: Modularer Querbaukasten / modular transversal toolkit

A3Golf

Start: 2013Global MQB volume Global MLB volume

201420132012 20162015

MQB volume China

MQB & MLB volume development of Volkswagen Group

MQB & MLB volume development of Volkswagen Group

19

Distribution of MQB savingsDistribution of MQB savings Different powertrains

Additional serial +option contentSavings to be partly absorbed to fulfill regulatory and legal requirements

Lower cost per unitLess EHpV1)

Less one-off expenditures

MQB platform ca. 60% of total material costs

= Potential savings

Margin improvement

Savings Expenditures Invest

1) Engineered Hours per Vehicle

The MQB's flexible design is able to accommodate alternative drives:

MQB – Driving forward economies of scale in unit cost, investment and supporting achievement of emission targets

TDI Diesel, FlexFuel and BiFuel currently not part of the product offering of Volkswagen Group China. First BEV will be introduced at the end of 2014.

TDI Diesel, FlexFuel and BiFuel currently not part of the product offering of Volkswagen Group China. First BEV will be introduced at the end of 2014.

Further strengthening of partnerships with SAIC and FAW

20

Signing ceremony May 26th, 2013 in BerlinConfirmed engagement in Changsha

Signing ceremony May 26th, 2013 in BerlinCapacity expansion in Foshan

SAIC FAW

Significant extension of product portfolio planned: 2018 with more than 100 models

Note: number of product models

CKD >35 FBU>65 >100

21

Commercial Vehicles

2018E:

2013: CKD 22 FBU 41 63

1,593

341320

2013 2014E 2018E

Significant growth of dealer networks planned*

>3,600

2,395

* Map includes only Volkswagen, Audi and Škoda dealers; discrepancies may occur due to reporting backlog 22

as of end of Q1

Xinjiang

Tibet

Qinghai

Gansu Inner Mongolia

Shaanxi

NingxiaShanxi

Hebei

Guangdong

Fujian

Shanghai

Shandong

Liaoning

Jilin

Heilongjiang

Beijing

Zhejiang

Tianjin

GuizhouHunan

Jiangxi

Guangxi

ChongqingHubei

Yunnan

Sichuan Anhui

Hainan

Henan Jiangsu88

129

53

58 101

39

100

4213

65

20364

14231

31

220

40

99

202

10

63

61

25

69

6

29

88

28

64

9

42

~2,750

Content

Our Momentum in China

Market Development




23

Volkswagen China – Product solutions to match our customer’s needs

Passat ChinaPassat USA

A6 Europe

A6L China

24

China special detail solutionsChina special detail solutions

China specific wheelbase extensions, trim and colorsChina specific wheelbase extensions, trim and colorsYeti Europe

Yeti ChinaChina exclusive spare wheel

Volkswagen China – Product solutions to match our customer’s needs

25

New Lavida New Jetta New SantanaNew Lavida New Jetta New Santana

Gran Lavida New BoraGran Lavida New Bora

Volkswagen Group China aims to actively engage in the NEV market with locally produced and localized PHEVs

26

20202013 20162013

Phase

Introduction

Timing

Import Local production

Localization of NEV technology

Development

Audi A3 e-tron

VW electric up!Porsche Panamera S E-Hybrid

Porsche 918 Spyder

Audi A6 e-tron

2016

Golf GTE

27

E-Scrub Process – Part of improvements with new technology E-Scrub Process – Part of improvements with new technology

Sustainable Production - Environmental Friendly Standard Factories

Heatrecovery

Renewableenergy

New Paint shops

Insulation

Cold watersystem

Energy-savinglightingsystems

Example FAW-VW FoshanExample FAW-VW Foshan

-22% -18%

CO2Energy

Water VOC*

-65%-23%

conventional processconventional process

process 2010Vprocess 2010V

Light Domes – improving lighting and saving electrical energy

Insulation of buildings for saving heating and cooling energy

First Chinese automotive plant with triple star Green Building Award

New Paint Shops - Savings through e.g. E-Scrub ProcessNew Paint Shops - Savings through e.g. E-Scrub Process

Consumption per Car

Advanced water treatment process –savings of 27% of fresh water demand through completed re-use of treated water

* Volatile organic compounds

Content


Market Development




28

Volkswagen Group China reported another strong operating result for Q1 2014

29

1) SVW Group/FAW-VW Group

Deliveries to Customers

Production (100%)1)

(’000 Units)

(’000 Units)

(€ m)

1,923

1,914

1,907

2010 2011

2,259

2,202

2,616

2012

2,815

2,643

3,678

2013

3,271

3,135

4,296

2014 Q1

881

842

1,241

4,3894,389 6,1346,134 8,4248,424(€ m) 9,569 2,835Operating profit (100%)

Operating profit (quotal)

Additional business opportunities: Increasing importance of retail finance

30

New Retail Finance Contracts

* Based on the total passenger car sales in the market China.

227,000

149,000

78,000

20122011

52%

91%

2014E2013

stronger finance demand expected

cash buyer dominance

20%

80%

2013

Finance Cash

min.30%

max. 70%

2018E

Finance Cash

25.6%74.4%

Finance Cash Buyers

9.9%

15.7%

VWFS China Retail Finance Penetrationin VGC Network

(% of deliveries to customers)

Financial Services expects increase in retail finance share*

YTD 2014

Additional business opportunities: Growing Pre-Owned Car business

31

Qualitative and quantitative roll-out of Group POC dealers

million units

Total Pre-Owned Car Market Forecast1)

1) Source: China Automotive Dealer Association in Feb 2014

3.5

2012 2016E

10.6

7.2

8.7

5.1

6.3

2014E

6.5

4.8

2013 2015E 2020E

18.2

10.9

2019E

16.0

10.3

2018E

14.0

9.5

2017E

12.4

8.44.8

3.1

2011

4.3

2.7

Pre-Owned Passenger CarPre-Owned Commercial Vehicle

111

285

182

420

330304

VW + SK(Das WeltAuto)

Audi(Refined

Recomm.)

Porsche(Approved Pre-

Owned)

Bentley(Bentley Pre-

Owned)

2013 2014E 2013 2014E 2013 2014E 2013 2014E

Group Pre-Owned Car Dealer Roll-out

0

0,5

1

1,5

2

2,5

3

3,5

4

Volkswagen Group China

32

Volkswagen Group China is well positioned to maintain its number one position in the market and seize additional opportunities in the future

Delivered vehicles in million units

Disclaimer

This 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.

This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.

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volkswagen group china · 2020. 9. 24. · 2004: founding of volkswagen group china for...

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