Ralph Brandstatter
VW’s China boss has been given more powers to align strategy there more closely with customers.
(Photo: dpa)
Volkswagen wants to largely stay out of price wars in China and continue to grow profitably in its most important market. “We will not participate in the discount battle at any price,” said China boss Ralf Brandstätter in an internal interview published by the carmaker on Wednesday. The group’s market position is strong enough. “For us, the focus is on profitability, not sales volume or market share.”
Brandstätter expects the Chinese car market to grow from around 22 million today to between 28 and 30 million vehicles by the end of the decade. “If we achieve sales of more than four million vehicles with the corresponding profitability in 2030 in this environment, that is a position that we could live with very well,” said the manager.
Volkswagen’s claim is to be the largest international carmaker in China. “It doesn’t matter to us whether another national manufacturer sells more vehicles than we do.” In its most important market, Volkswagen is under increasing pressure from up-and-coming Chinese manufacturers, who are more successful with electric cars than their western competitors.
Sales down since the pandemic
In the first quarter, the Chinese manufacturer BYD, with a market share of eleven percent of the total market, i.e. including the still dominant combustion cars, pushed the VW brand, which had been the leading brand there for decades, from first place. The group’s sales have fallen in China – from around 4.2 million units before the Covid pandemic to almost 3.2 million vehicles last year.
In response, the board changed its strategy and gave Brandstätter greater decision-making authority. It is intended to align Volkswagen more closely with the needs of customers in its largest single market. Development “in China for China” is the magic word. To this end, the group is spending around one billion euros on a new development center for fully networked electric cars.
The new company is to bring together the development of vehicles and components as well as procurement and reduce development times by around 30 percent.
More: According to the analysis, VW and BMW are catching up when they turn to electric cars
First publication: 05/31/2023, 10:56 am.