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Volkswagen Goes for Gold in China

DW Staff (act)January 10, 2008

Volkswagen improved its sales in China last year. Volkswagen China has an 18 percent share of the total passenger car market in the People's Republic. And it's hoping to continue on its successful path this year.

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Volkswagen has 18 percent of the Chinese car market
Volkswagen has 18 percent of the Chinese car marketImage: dpa

Volkswagen China seems satisfied with its sales figures from last year -- the firm sold over 910,000 vehicles but the local head Winfrid Vahland is expecting even more this year.

"We've introduced a motto for 2008 because of the Olympic Games -- 'Strive for the gold medal'," he explained.

"We also want to progress in terms of environmental protection by becoming China's greenest car manufacturer. And we want to surpass the 'million cars sold' mark."

Revamping for China

Volkswagen is relying on new car models to boost its growth in China. The firm has revamped some of its models to fit the Chinese taste.

The headlights for example point upwards so it seems as if the cars are laughing. The interiors are more shiny and the exteriors have more chrome.

The Cross-Polo has just been brought out onto the Chinese market whereas the Touran is having a makeover.

"We're going to bring out two new models for the Beijing car show in mid-April," Vahland revealed. "They have been created here in China for the Chinese."

Olympic boost

Volkswagen China is also hoping to get a boost from the Olympic Games. Volkswagen is one of the games' national sponsors.

5,000 Volkswagen cars will accompany the Olympic torch relay.

"We've become more famous and our image has improved significantly. Facts are proving that our Olympic sponsoring is worth it," Vahland said triumphantly.

Domestic competition

But Volkswagen also has to reckon with growing domestic competition.

The Volkswagen China head is sure that some Chinese firms will soon be determining the international market.

"It's logical that the Chinese passenger car industry is developing. It has a market share of 27 percent. But that's normal and it makes sense that it will go up. I would say it will be between 30 and 40 percent."

Brake on economic growth

Vahland is optimistic about 2008. But he knows that the Chinese economy cannot continue growing at such a fast pace as now and he thinks his firm will also be affected by government policies to put a brake on the growth.

"They've introduced liquidity restrictions and they've increased interest rates," he explained. "That will have an effect. Looking at the world economy, there will be growth in 2009 but it will be less significant."

The Olympic Games are taking place in Beijing in August. Until then things can only go well for Volkswagen China.