VOLKSWAGEN has been in the Chinese market for more than 30 years. In fact, the German carmaker has established such a stable foothold in China that it now has the largest share of passenger cars sold, as confirmed by the latest car delivery figures. In the first quarter of the year alone, the Volkswagen brand delivered 722,800 cars to customers there, for an increase of 6.5 percent over last year. Indeed, Volkswagen now rules the Middle Kingdom insofar as cars are concerned.
Volkswagen Philippines invited a group of motoring journalists, which included this writer, to the Auto Shanghai 2019 on April 15 to 20. Upon our arrival, we were ushered into a bus bound for our hotel, and it was while we were on the road that I validated and confirmed what they’ve been saying: Shanghai is a Volkswagen City—VW badges and nameplates everywhere.
When I looked to my left, there was a Volkswagen. When I looked to my right, there was a Volkswagen. Behind us was another Volkswagen. They were literally all over the place.
When we visited the Auto Shanghai 2019 venue, we feasted our eyes on the magnificent Volkswagen China display, which consisted of the Generation SUV exhibit; Electric Cars exhibit featuring an electric sports car; and the Next Generation exhibit starring the Tiguan, Beetle, Teramont, Lavida, Lamando, Passat, Tharu, Polo, Golf, Touareg, Tayron, T-Cross, Santana, PHideon, Touran, T-Roc, Jetta and the world premier of the concept car—I.D. Roomzz.
The concept car shows us what we can expect from full-size electric SUVs in the future. It is a monolith, appearing to be seamlessly machined from solid metal, which effortlessly moves around using the power of electricity silently and without emissions.
On the other hand, the newly appointed Volkswagen Philippines President Felipe Estrella III said that two new vehicles will be launched in the Philippines within the next 12 months, but he wouldn’t reveal which ones. He only gave me a clue when he said, “The two vehicles that will be launched in Manila both start with a letter T.” I suspect that the vehicles he was referring to will be the Teramont and the Tharu, or the T-Cross.
The following day, Volkswagen Philippines took us to the Anting Assembly Plants 1, 2 and 3 of SAIC Volkswagen Automotive Co. Ltd., formerly known as Shanghai Volkswagen Automotive Co. Ltd., or Shanghai Volkswagen. The assembly plant is an automobile-manufacturing company headquartered in Anting, Jiading District—the western part of Shanghai. Anting, which is also called the “Auto City,” is an hour-and-a-half drive from Shanghai where the Shanghai International Circuit, China’s first Formula One race track, and the Shanghai Auto Museum are also located.
The joint venture between Volkswagen Group and SAIC Motor was founded in 1984 with an investment ratio of 50:50 percent, which produces cars under the Volkswagen and Škoda marques. The joint venture is made up of equity (as of 2008) from Volkswagen AG (40 percent), Volkswagen (China) Invest (10 percent), SAIC (50 percent), with a fixed-term venture for 45 years, which will run until 2030. This venture is currently the largest German-Chinese partnership in the automotive industry.
The company employs about 35,821 with a standard capacity of 2,310,000 units per year. The product lineup under the VW brand includes the Polo family, new Santana family, Lavida family, Lamando, Passat, Phideon, Tharu, Tiguan, Teramont and Touran.
SAIC Volkswagen’s Shanghai plant was by far the winner among all new Joint Ventures (JVs), as it produced cars that could function as taxis, vehicles for government officials and transport for the newly emerging business elite. SAIC Volkswagen began automobile production in 1985. As car imports fell to some 34,000 in 1990, SAIC Volkswagen’s production of its Santana models reached nearly 19,000 vehicles that year. By 1993 SAIC Volkswagen’s output had reached 100,000 vehicles. Volkswagen was aided by some Shanghai municipal efforts. Various restrictions on engine size, as well as incentives to city taxi companies, helped ensure a safe market in the company’s relatively wealthy home arena. Volkswagen also encouraged its foreign parts suppliers to create joint ventures in China, and their resulting product helped SAIC Volkswagen achieve an 85 percent local content rate by 1993.
In May 2018, SAIC Volkswagen started to export the Santana, Lavida, Lamando, and Tiguan to the Philippines as part of the new Asean-China Free Trade Agreement (ACFTA).
The JV is also in the process of building an electric car plant in Anting. It is expected to make 300,000 e-vehicles per year, starting in 2020.
According to Immo Buschmann, SAIC Volkswagen senior director for Sales, “27.5-percent share of global passenger car market belongs to Volkswagen with 82,773,189 units sold from 1984 to 2017.” In 2018 Volkswagen sold 4,207,055 units—maintaining their No.1 position in the passenger car segment in China.
“The Volkswagen group will invest €34 billion into e-mobility until 2022 and €10 billion will be invested in China,” said Buschmann.