Volkswagen'S Market Share In China Is Close To 20%: The Differentiation Between The North And The South Is Intensifying

"In the first half of the year, the Volkswagen Group delivered 1.59 million vehicles in the mainland and Hong Kong markets, a year-on-year decrease of 17% -- a year-on-year decline of 22% compared with the whole automobile market. This means that the Volkswagen group not only outperforms the overall car market, but also increases its market share to about 20%." On July 17, Feng Sihan, CEO of Volkswagen Group (China), said in an interview with the media.

Feng Sihan said that this is mainly due to the performance of two market segments: Jetta, which aims at the third and fourth tier cities, has been listed for less than a year, but has already occupied 1% of the market; and the sales of luxury brands such as Audi, Porsche and Lamborghini have increased compared with the same period last year.

However, the sales volume of Volkswagen brand in the first half of the year was 1.1678 million, down 18.3% from the same period last year. Skoda's brand performance was poor, with sales of 77400 vehicles, a sharp drop of 38.5%. As a result, the performance of VW's two joint ventures in China began to diverge.

Ice and fire. VW's sales fell by 29.7 million units in the first half of the year, compared with that of the first half of the year.

Over the past years, FAW Volkswagen and SAIC Volkswagen have been competing fiercely for the top spot in China's auto market. SAIC Volkswagen won the first place in sales for four consecutive years from 2015 to 2018, but in 2019, FAW-VW achieved a sales volume of 2.07 million vehicles, surpassing that of SAIC Volkswagen by 1.97 million. In the first half of this year, FAW Volkswagen and SAIC Volkswagen still ranked first and second, but the gap between them has been significantly widened.

A new watershed has emerged. With Jetta's pride and Skoda's disappointment, FAW Volkswagen gave SAIC Volkswagen a severe blow in the low-end market; however, SAIC Audi is on the way, and the competition between North and South Volkswagen in the luxury car market is also on the verge of breaking out. In the second half of the year, the two sides will launch MEB platform electric vehicles, which will also open a new contest.

Behind the split between the north and the South

"The impact of the epidemic on the market in the first quarter is very obvious, but the market performance of the Volkswagen brand has shown a strong recovery since April. As the situation gradually improves, we are cautiously optimistic about the steady recovery of the performance of the Volkswagen brand in the Chinese market in the second half of the year. " Feng Sihan said.

In the mainstream joint venture market, although the sales volume of Volkswagen brand decreased significantly in the first half of the year, it increased by 4.1% in the SUV market. SUV is also an important factor to reverse the pattern of mass competition between the north and the south. Previously, FAW-VW, which has never had SUV as a late mover, has quickly opened up the situation by virtue of tanyue, Tange and other models. Therefore, the sales volume gap between Volkswagen and FAW brand has been greatly reduced.

In the car market, SAIC Volkswagen Passat has not come out of the shadow of "collision door". In the first half of this year, its sales volume was lower than that of major competitors such as accord, Teana and new maiteng. The word-of-mouth crisis caused by this also has a huge impact on SAIC Volkswagen as a whole.

For SAIC Volkswagen, in addition to the decline of Volkswagen brand, the sharp decline in Skoda sales is also the reason for the widening gap between SAIC Volkswagen and FAW Volkswagen. In fact, Skoda has fallen into a development bottleneck in China in recent years. This year, under the influence of the epidemic situation, it has suffered a more serious blow. From 2016 to 2018, the sales volume of Skoda brand has been maintained at about 330000 vehicles. In 2019, the market sales volume dropped to 282000 vehicles, with a year-on-year decrease of 17.3%. In the first half of this year, Skoda brand declined sharply.

Feng Sihan said frankly that Skoda's market segmentation competition is very fierce, including competition from domestic brands in China and "dimension reduction" competition from international brands.

In April this year, Skoda lowered its official guidance price in the hope of exchanging price for quantity. But from the present point of view, whether the price reduction can bring sales growth, the actual effect remains to be tested.

In terms of volume, in the first half of the year, FAW Volkswagen sold 300000 more than SAIC Volkswagen, which is almost the sales volume of FAW Volkswagen Audi. In other words, there is an Audi gap between FAW Volkswagen and SAIC Volkswagen.

Under such circumstances, the blank problem of SAIC Volkswagen in the field of luxury cars is further highlighted. Coupled with the characteristics of consumption upgrading in China's automobile market, it is more urgent for SAIC Volkswagen to introduce SAIC Audi.

Recently, according to foreign media reports, the Volkswagen Group and SAIC Group plan to invest 4.13 billion yuan to transform the SAIC Volkswagen factory in Shanghai to produce new Audi models. In this regard, SAIC and Volkswagen both said that SAIC and Audi's cooperation plan is in the process of promotion.

However, Feng stressed that FAW Group will remain Audi's main partner in China. In addition, according to the previous promise that "SAIC Audi's products will be put into production in 2021 and can not be sold earlier than January 2022", SAIC Audi still has some time to go before its real sales. SAIC Audi's landing is difficult to stop, but there are still many variables about how much spray can be aroused.

New battlefield of electric vehicle

In the past two years, the Volkswagen Group's new energy strategy has become more radical and has announced a full-scale transition to electrification. This transformation plan will also become a new battlefield for the masses of the north and the south.

"We are looking forward to the formal production of MEB platform electric vehicles in Foshan and Anting in October this year, as well as the first ID. series models to be launched in the Chinese market. In addition, the company will make a series of strategic investment in Jianghuai group, such as Jianghuai group, to increase its holdings in domestic enterprises such as Jianghuai group Feng Sihan said.

Although Volkswagen already has its third joint venture partner in China, JAC Volkswagen mainly produces pure electric vehicles. However, the north and South masses will still be the key to the promotion of the electric strategy in China. Jianghuai Volkswagen will not compete directly with the north and South masses to avoid internal friction. In terms of electric vehicle strategy, both north and South Volkswagen will be consistent with Volkswagen's global strategy.

The Volkswagen Group has a comprehensive electric vehicle development strategy. According to Feng Sihan, the design of VW brand ID. family products is different, and the user experience is also different. In addition, VW has a special joint venture company to expand the charging system. At the same time, Volkswagen will change its sales model and formulate some pricing strategies.

"Our electric vehicle products are totally new. We believe that excellent products, high-quality service and good charging infrastructure can replace fuel vehicles with new energy vehicles. " Feng Sihan said.

For the ID. series electric vehicles, the Volkswagen Group is full of confidence, and the outside world is also full of expectations. At present, there is no accurate information on which Factory Volkswagen's first pure electric vehicle based on MEB platform will be put into production. From the perspective of the two joint ventures, how to allocate the resources of the two joint ventures is very important.

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