October 10, one month later, is the day when the German public enters the Chinese market for a full 20 years. At what time will Volkswagen's mood be toasted? In the face of difficult times, the so-called "30 years of Hedong, 30 years of Hexi," and 10 years later, in this China's military strategist, Volkswagen will be referring to where? Volkswagen's painful moment On August 19th, news from the German Volkswagen stated that it will slow down its investment in China in the short term and it is not currently planning to further expand its production capacity. At the same time, the vice president of Shanghai Volkswagen Black told the media that Shanghai Volkswagen will carry out a large-scale "downsizing plan." "This year and next year, Shanghai Volkswagen will reduce the cost of 4.2 billion yuan." This is obviously different from the previous statement. Just a year ago on July 15, Volkswagen just announced that it will invest an additional 6 billion euros in China in the next five years to increase its annual production in China to 1.6 million. Even in June this year, there was news that the German public will build three more production bases in China. At one time, Volkswagen internally believed that the lack of capacity in the two joint ventures was an important reason for its declining market share in China. However, this year's rapid changes in the Chinese auto market caused a dramatic change in the attitude of Volkswagen CEO David Bieder. He recently said: “Any plan to increase capital and expand production capacity is It will only be decided after next year.†In fact, the slimming of Shanghai Volkswagen is only part of the Volkswagen Group's global streamlining cost plan. Compared to the Chinese market, Volkswagen's days around the world are even worse. In 2003, Volkswagen’s global income dropped by 50%. In the first half of this year, the Volkswagen Group’s net profit fell by 36%. Two months ago, Volkswagen has adjusted its 2004 operating profit target from EUR 2.5 billion to EUR 1.9 billion. In order to turn the tide, Volkswagen has launched a large-scale change called "go all out" at the beginning of this year. It plans to cut the cost of 2 billion euros (about 2.4 billion U.S. dollars) in the next six years. As we all know, German Volkswagen was once unique in the Chinese auto market. Its market share in the 1980s even reached 90%, but its advantage has gradually diminished. It was 50% in 2001, 40% in 2002, and it dropped to 32 in 2003. %. At the end of July this year, according to German media reports, Volkswagen’s market share in China hit a record low of 16%. In the long run, Volkswagen’s competitors are advancing. Also facing the global auto market slump, Toyota sold nearly 6.8 million vehicles worldwide last year, making it the second-largest automaker in the world. In terms of profitability, it is even more unmatched. As of last fiscal year in March this year, Toyota achieved a net profit of approximately US$10.28 billion. It is the profit of the three largest US auto companies: GM, Ford, and Dyke. Twice the sum. Also facing the avalanche of the Chinese auto market, in the first quarter of this year, Shanghai GM's year-on-year growth rate reached 200%, far more than other competitors. In June this year, Shanghai GM’s market share rose to 13.7%, surpassing Shanghai Volkswagen, the flagship of the auto industry for the first time. Although after the price reduction, Volkswagen's sales in China returned to the top position, but a fact has been indisputable - in the face of the impact of many competitors, the era of Volkswagen Tokgo defeat is over. Cheng Xiaoxiao, and Xiao Hui's more general view is that the reason why the former king came to this stage was because of the hidden dangers buried in his brilliant era. An industry veteran believes that Volkswagen's biggest mistake is that Santana, which first got the Chinese market, is an outdated product. Although it has gained tremendous advantages from its earlier entry into the Chinese market, it has achieved almost unprecedented success. At the same time, the public has also overlooked the hidden dangers of the product itself. “Since Santana lacks international competitiveness, it cannot be exported on a large scale, which in turn restricts its competitiveness in parts and components. In addition, due to Santana's small space for product upgrades, It also caused the inability to compete with other companies' new models.†The analyst said that due to the success of Santana, Volkswagen did not make full use of the huge advantages of early entry to lay a solid foundation for future strategies, but left a lot The cumbersome — long-term Santana has become synonymous with Volkswagen, Volkswagen has to pay more to change its image can only produce low-end cars. “Now it seems that compared to other competitors, the public is nothing more than making a fortune from Santana, and does not provide any value to its long-term strategy.†In fact, on the other hand, Volkswagen’s conservative strategy is also Which played a big role. For example, in the price strategy, VW has always been a monolith in China. Despite having many years of opportunity to adjust market prices, it has never used this advantage in a planned way. Instead, GM and Honda, who have come from behind, have led the price cuts. He himself had to be forced to follow up. This kind of conservation is also reflected in the component system. After 20 years of entry into China, Volkswagen has not been able to establish a component system in China. The key components of North-South Volkswagen have been imported almost entirely from Germany. This has made the public profitable. It is said that it sells imported components to China every year. The profits can account for more than 30% of the public’s profits in China. However, on the other hand, it has also brought many hidden dangers to the public. The most direct example is that due to the appreciation of the euro in 2003, the import of spare parts caused heavy losses to the public. The direct loss on the exchange rate alone was as high as several hundred million euros. The more crucial issue lies in the separate administration of North and South. After a joint venture with SAIC in 1984, Volkswagen quickly reunited with FAW. On the surface, it exhausted its policy space, quickly occupied the market, and obtained huge profits in the short term. However, as the wings of Chinese joint venture partners became increasingly full, the public began to Taste the bitterness that you personally brewed. Regardless of whether it is in the parts procurement system or the sales network, North-South Volkswagen is doing its own thing, which greatly increases public operating costs in China. In addition, the public must also have a bowl of water to balance the demands of FAW and SAIC on the models. This will inevitably lead to internal consumption competition. “The split between the North and the South is the public’s cancer in China,†said a senior analyst who has long been concerned about the public. “The public today is quite uncomfortable and may be able to self-optimize, but what is the future fate?†It depends on the cooperation of the Chinese joint venture partner.†Difficult adjustments have already been noticed by the public for several years, but the German chariots that have been in operation for nearly 20 years are not easy to change. From this perspective, the slowdown of the Chinese auto market is precisely an opportunity for the public to change. The Chinese market has become the highlight of the Volkswagen Global Group. How to make the public out of the predicament in China is of great significance. On May 19 of this year, VW took the lead in announcing major structural adjustments, establishing "Volkswagen Group China" as the primary organization for the unified management of Chinese operations, and replacing the original Asia Pacific region, directly responsible to the Volkswagen Group's global board of directors. This measure was widely praised by observers. One industry person used the phrase “clear thinking and unprecedented efforts†to describe this adjustment. However, as mentioned above, adjusting China's headquarters is only the first step. The more important issue is how the two joint ventures of the public will adjust. The issue of the two joint ventures involving the general public has been aggravated and the adjustment is easier said than done. In an interview with reporters, people have repeatedly heard people mention one thing: Five years ago the German public once united with North and South Volkswagen to jointly collaborate on an engine project. Zhang Xiaoji, then the director of the automobile division of the State Bureau of Machinery Industry, coordinated the task. After all, it will not be over for a year. In early 2002, Volkswagen (Shanghai) Transmission Co., Ltd. was established. Volkswagen occupied 60% of the shares. FAW and SAIC each took a 20% share. This move was seen as the beginning of VW's integration of supplier structure in China. However, industry insiders pointed out that this does not mean that the future will be smooth after the integration of the North and the South. “This company is more to solve the incremental problem, and to solve the existing stock problem can fundamentally eliminate the hidden dangers of public development in China, but it will inevitably touch some vested interests, the prospects are difficult to predict.†One once served The CEOs of North and South China Volkswagen Consulting Co., Ltd. told the reporter that “in China, cooperation between provinces is extremely difficult, not to mention the two competitors of FAW and SAIC,†he said. “The upper part of the Chinese side is reluctant to do it. The surface is very good, so that the Germans can't touch the north and the south. In the end, it can't be accomplished.†In other words, in this big show of the multinational auto giants' adjustment of China’s strategy, the public was the earliest action, but the action may be minimal. Although at present, the public has accelerated the adjustment of China's strategy in various aspects - such as putting more and more key parts production and certification in China; putting more top-level models such as Phaeton into the Chinese market, and also achieved auto finance. Breakthroughs, the latest news is that plans for the production of North-South Volkswagen interchange models are also underway. However, in the two key areas: North and South Volkswagen's parts and components systems and sales integration, it has not changed much. Analysts believe that for the general public, it is now the most painful transition period. On the issue of mass integration between the North and the South, the public can only take fine-tuned measures and go for illness. But this also undoubtedly left the competitors with time and space. The reason is simple. Compared with the public, GM and Toyota have greater successor advantages. General Motors was once rated by the industry as the clearest foreign-funded company in China’s strategy. This time, following the public’s announcement, it also announced that it will upgrade the Chinese market’s specifications and relocate its Asia-Pacific headquarters from Singapore to Shanghai, China, laying the foundation for future in-depth development. The advantage of Toyota is in the aspect of spare parts, an industry analyst said, "On the one hand, its locality is relatively close to China, on the other hand it has completed the layout of spare parts base in Southeast Asia and other places, so Toyota's local Pressures are not as large as those of German companies, and they are also more cost-effective.†As early as 2000, Toyota had established nearly 60 component companies in China. From 1997 to 1999, Toyota has successively established four key automobile parts production plants in China. The more terrible strategy is that both GM and Toyota are actively preparing for a new generation of clean energy vehicles. According to reports, Shanghai GM is currently studying the market feasibility of launching a hybrid car in China. If the plan is really implemented, this hybrid car will be a small SUV. Toyota has gone further in this respect. Its hybrid vehicles have been put into commercial operation in Japan for many years, and its new hybrid sedan Prius is already testing into the Chinese market. The German Volkswagen has no major measures in this regard, although it is currently ranked fourth in the world's auto companies, but in the development of a new generation of energy vehicles seems to have lagged behind competitors.
Overview: After the 10th anniversary of Volkswagen's entry into China,
October 10, one month later, is the day when the German public enters the Chinese market for a full 20 years. At what time will Volkswagen's mood be toasted? In the face of difficult times, the so-called "30 years of Hedong, 30 years of Hexi," and 10 years later, in this China's military strategist, Volkswagen will be referring to where? Volkswagen's painful moment On August 19th, news from the German Volkswagen stated that it will slow down its investment in China in the short term and it is not currently planning to further expand its production capacity. At the same time, the vice president of Shanghai Volkswagen Black told the media that Shanghai Volkswagen will carry out a large-scale "downsizing plan." "This year and next year, Shanghai Volkswagen will reduce the cost of 4.2 billion yuan." This is obviously different from the previous statement. Just a year ago on July 15, Volkswagen just announced that it will invest an additional 6 billion euros in China in the next five years to increase its annual production in China to 1.6 million. Even in June this year, there was news that the German public will build three more production bases in China. At one time, Volkswagen internally believed that the lack of capacity in the two joint ventures was an important reason for its declining market share in China. However, this year's rapid changes in the Chinese auto market caused a dramatic change in the attitude of Volkswagen CEO David Bieder. He recently said: “Any plan to increase capital and expand production capacity is It will only be decided after next year.†In fact, the slimming of Shanghai Volkswagen is only part of the Volkswagen Group's global streamlining cost plan. Compared to the Chinese market, Volkswagen's days around the world are even worse. In 2003, Volkswagen’s global income dropped by 50%. In the first half of this year, the Volkswagen Group’s net profit fell by 36%. Two months ago, Volkswagen has adjusted its 2004 operating profit target from EUR 2.5 billion to EUR 1.9 billion. In order to turn the tide, Volkswagen has launched a large-scale change called "go all out" at the beginning of this year. It plans to cut the cost of 2 billion euros (about 2.4 billion U.S. dollars) in the next six years. As we all know, German Volkswagen was once unique in the Chinese auto market. Its market share in the 1980s even reached 90%, but its advantage has gradually diminished. It was 50% in 2001, 40% in 2002, and it dropped to 32 in 2003. %. At the end of July this year, according to German media reports, Volkswagen’s market share in China hit a record low of 16%. In the long run, Volkswagen’s competitors are advancing. Also facing the global auto market slump, Toyota sold nearly 6.8 million vehicles worldwide last year, making it the second-largest automaker in the world. In terms of profitability, it is even more unmatched. As of last fiscal year in March this year, Toyota achieved a net profit of approximately US$10.28 billion. It is the profit of the three largest US auto companies: GM, Ford, and Dyke. Twice the sum. Also facing the avalanche of the Chinese auto market, in the first quarter of this year, Shanghai GM's year-on-year growth rate reached 200%, far more than other competitors. In June this year, Shanghai GM’s market share rose to 13.7%, surpassing Shanghai Volkswagen, the flagship of the auto industry for the first time. Although after the price reduction, Volkswagen's sales in China returned to the top position, but a fact has been indisputable - in the face of the impact of many competitors, the era of Volkswagen Tokgo defeat is over. Cheng Xiaoxiao, and Xiao Hui's more general view is that the reason why the former king came to this stage was because of the hidden dangers buried in his brilliant era. An industry veteran believes that Volkswagen's biggest mistake is that Santana, which first got the Chinese market, is an outdated product. Although it has gained tremendous advantages from its earlier entry into the Chinese market, it has achieved almost unprecedented success. At the same time, the public has also overlooked the hidden dangers of the product itself. “Since Santana lacks international competitiveness, it cannot be exported on a large scale, which in turn restricts its competitiveness in parts and components. In addition, due to Santana's small space for product upgrades, It also caused the inability to compete with other companies' new models.†The analyst said that due to the success of Santana, Volkswagen did not make full use of the huge advantages of early entry to lay a solid foundation for future strategies, but left a lot The cumbersome — long-term Santana has become synonymous with Volkswagen, Volkswagen has to pay more to change its image can only produce low-end cars. “Now it seems that compared to other competitors, the public is nothing more than making a fortune from Santana, and does not provide any value to its long-term strategy.†In fact, on the other hand, Volkswagen’s conservative strategy is also Which played a big role. For example, in the price strategy, VW has always been a monolith in China. Despite having many years of opportunity to adjust market prices, it has never used this advantage in a planned way. Instead, GM and Honda, who have come from behind, have led the price cuts. He himself had to be forced to follow up. This kind of conservation is also reflected in the component system. After 20 years of entry into China, Volkswagen has not been able to establish a component system in China. The key components of North-South Volkswagen have been imported almost entirely from Germany. This has made the public profitable. It is said that it sells imported components to China every year. The profits can account for more than 30% of the public’s profits in China. However, on the other hand, it has also brought many hidden dangers to the public. The most direct example is that due to the appreciation of the euro in 2003, the import of spare parts caused heavy losses to the public. The direct loss on the exchange rate alone was as high as several hundred million euros. The more crucial issue lies in the separate administration of North and South. After a joint venture with SAIC in 1984, Volkswagen quickly reunited with FAW. On the surface, it exhausted its policy space, quickly occupied the market, and obtained huge profits in the short term. However, as the wings of Chinese joint venture partners became increasingly full, the public began to Taste the bitterness that you personally brewed. Regardless of whether it is in the parts procurement system or the sales network, North-South Volkswagen is doing its own thing, which greatly increases public operating costs in China. In addition, the public must also have a bowl of water to balance the demands of FAW and SAIC on the models. This will inevitably lead to internal consumption competition. “The split between the North and the South is the public’s cancer in China,†said a senior analyst who has long been concerned about the public. “The public today is quite uncomfortable and may be able to self-optimize, but what is the future fate?†It depends on the cooperation of the Chinese joint venture partner.†Difficult adjustments have already been noticed by the public for several years, but the German chariots that have been in operation for nearly 20 years are not easy to change. From this perspective, the slowdown of the Chinese auto market is precisely an opportunity for the public to change. The Chinese market has become the highlight of the Volkswagen Global Group. How to make the public out of the predicament in China is of great significance. On May 19 of this year, VW took the lead in announcing major structural adjustments, establishing "Volkswagen Group China" as the primary organization for the unified management of Chinese operations, and replacing the original Asia Pacific region, directly responsible to the Volkswagen Group's global board of directors. This measure was widely praised by observers. One industry person used the phrase “clear thinking and unprecedented efforts†to describe this adjustment. However, as mentioned above, adjusting China's headquarters is only the first step. The more important issue is how the two joint ventures of the public will adjust. The issue of the two joint ventures involving the general public has been aggravated and the adjustment is easier said than done. In an interview with reporters, people have repeatedly heard people mention one thing: Five years ago the German public once united with North and South Volkswagen to jointly collaborate on an engine project. Zhang Xiaoji, then the director of the automobile division of the State Bureau of Machinery Industry, coordinated the task. After all, it will not be over for a year. In early 2002, Volkswagen (Shanghai) Transmission Co., Ltd. was established. Volkswagen occupied 60% of the shares. FAW and SAIC each took a 20% share. This move was seen as the beginning of VW's integration of supplier structure in China. However, industry insiders pointed out that this does not mean that the future will be smooth after the integration of the North and the South. “This company is more to solve the incremental problem, and to solve the existing stock problem can fundamentally eliminate the hidden dangers of public development in China, but it will inevitably touch some vested interests, the prospects are difficult to predict.†One once served The CEOs of North and South China Volkswagen Consulting Co., Ltd. told the reporter that “in China, cooperation between provinces is extremely difficult, not to mention the two competitors of FAW and SAIC,†he said. “The upper part of the Chinese side is reluctant to do it. The surface is very good, so that the Germans can't touch the north and the south. In the end, it can't be accomplished.†In other words, in this big show of the multinational auto giants' adjustment of China’s strategy, the public was the earliest action, but the action may be minimal. Although at present, the public has accelerated the adjustment of China's strategy in various aspects - such as putting more and more key parts production and certification in China; putting more top-level models such as Phaeton into the Chinese market, and also achieved auto finance. Breakthroughs, the latest news is that plans for the production of North-South Volkswagen interchange models are also underway. However, in the two key areas: North and South Volkswagen's parts and components systems and sales integration, it has not changed much. Analysts believe that for the general public, it is now the most painful transition period. On the issue of mass integration between the North and the South, the public can only take fine-tuned measures and go for illness. But this also undoubtedly left the competitors with time and space. The reason is simple. Compared with the public, GM and Toyota have greater successor advantages. General Motors was once rated by the industry as the clearest foreign-funded company in China’s strategy. This time, following the public’s announcement, it also announced that it will upgrade the Chinese market’s specifications and relocate its Asia-Pacific headquarters from Singapore to Shanghai, China, laying the foundation for future in-depth development. The advantage of Toyota is in the aspect of spare parts, an industry analyst said, "On the one hand, its locality is relatively close to China, on the other hand it has completed the layout of spare parts base in Southeast Asia and other places, so Toyota's local Pressures are not as large as those of German companies, and they are also more cost-effective.†As early as 2000, Toyota had established nearly 60 component companies in China. From 1997 to 1999, Toyota has successively established four key automobile parts production plants in China. The more terrible strategy is that both GM and Toyota are actively preparing for a new generation of clean energy vehicles. According to reports, Shanghai GM is currently studying the market feasibility of launching a hybrid car in China. If the plan is really implemented, this hybrid car will be a small SUV. Toyota has gone further in this respect. Its hybrid vehicles have been put into commercial operation in Japan for many years, and its new hybrid sedan Prius is already testing into the Chinese market. The German Volkswagen has no major measures in this regard, although it is currently ranked fourth in the world's auto companies, but in the development of a new generation of energy vehicles seems to have lagged behind competitors.