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Suitable for China? VW models at the Shanghai auto show in April

Photo: ALEX PLAVEVSKI / EPA

Volkswagen wants to stay largely 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 therefore strong enough for this. "For us, the focus is on profitability, not on sales volume or market share."

By the end of the decade, Brandstätter expects the Chinese car market to grow from around 22 million today to 28 to 30 million vehicles. "If we achieve sales of more than four million vehicles in this environment in 2030 with corresponding profitability, that is a position 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."

Post-Covid: One million fewer cars sold

China is Volkswagen's most important market. There, of all places, the group is under growing pressure from up-and-coming Chinese manufacturers who are more successful with electric cars than their Western competitors.

In the first quarter, the Chinese manufacturer BYD displaced VW from first place with a market share of eleven percent of the total market, i.e. including the still dominant combustion cars. For decades, VW was the leading car brand in China.

The Group's sales fell in China – from around 4.2 million units before the Covid pandemic to just under 3.2 million vehicles last year. In response, the board changed its strategy and gave Brandstätter greater decision-making power.

In this way, Brandstätter is to align the Volkswagen models more closely with the needs of customers in the largest single market. Development "in China for China" is the buzzword. To this end, the Group is spending around one billion euros on a new development center for fully connected electric cars.

The new company is expected to bring together the development of vehicles and components as well as procurement and reduce development times by around 30 percent.

mamk/Reuters