VW target Chinese domination with $19 billion investment
They've pretty much bought up half of the European automotive market and now German auto giant Volkswagen are targeting China for domination.
VW already has a market share of 16% in China but have piled together $19 billion dollars to invest in the Chinese sector. The Wolfsburg-based firm is already on track to sell over two million cars there this year and is forecasting a 15% increase in sales over last year too.
According to CEO and president of VW China, Karl-Thomas Neumann, "the steady growth will make 2011 the most successful year for Volkswagen in China" thanks to the country's almost insatiable appetite for Western motors.
VW has been savvy with its quest to dominate the Chinese market however. The German manufacturer has partnered up with Chinese companies Shanghai Automotive and FAW to create a base in the Far East and more importantly tiptoe around the tough Chinese legislation.
Foreign vehicles are lumped with heavy purchase and import taxes in China, but with VW setting up shop out there, the firm has gone some way to mitigate the drawbacks of buying one of its cars.
No import tax and a reduced purchase price, thanks to the units being manufactured in China, the prospect of a VW is mightily more appealing in China now – especially next to the Chinese's domestic products...
The two million sales target VW is set to smash this year will become small potatoes by 2015 though. The German firm has bullishly set itself a target of shifting over three million units just over three years from now.
It'll do it by launching nearly 50 new models in China in that window. The whole of the VW group probably only has a few more than 50 models on offer in Europe, so it looks like the designers and engineers at the Wolfsburg factory are going to be flat out with the development of the proposed plans.