Analysis on the Change of Volkswagen's Passenger Car Market Share in China since 2002

In the more than ten years after China's accession to the WTO, the domestic passenger car market has experienced a period of rapid development. Although the market for domestic passenger cars (excluding micro-customers) in China has always maintained a leading position, its market share (refers to domestic use) The share in the car market, the same below, has experienced two stages of rapid decline and steady development. The specific conditions are as follows.

In the domestic passenger car market in China, the changes in the market share of VW in China have experienced two stages of development over the past decade. From 2002 to 2005 as the first phase: Volkswagen’s market share of passenger vehicles in China continued to drop sharply from 40% to below 20%; from 2006 to now, its market share remained stable: it remained at 16%-20% (As shown in Figure 1). Among them, last year and the first half of this year, under the background of the slowdown in the growth of China's auto market, the sales volume of Volkswagen's domestic passenger vehicles still maintained rapid growth, and the market share increased to 18.0% and 19.5% respectively.

The first stage: the sharp decline in market share fell below 20%

From 2002 to 2005, the market share of Volkswagen’s passenger vehicles in China continued to fall from 40% in 2002 to 17.7% in 2005. Among them, in 2003, Volkswagen’s passenger vehicle sales in China achieved rapid growth, but the increase (36.4%) was far lower than the passenger vehicle market average (72.1%), and the market share fell from 40% to 31.7%. In 2004, Volkswagen's sales of passenger cars in China first fell, and its market share dropped to 26.1%. In 2005, its sales volume fell again, and its market share fell below 20% to 17.7%.

The sharp decline in the market share of Volkswagen's passenger vehicles in China can be mainly attributed to its market strategy mistakes. Van Andel said in 2005 that "In recent years, the Chinese automobile market has indeed undergone great changes, but we have not estimated the impact of this change enough and have not made timely adjustments. This is our Mistakes are also the main reason for the loss of market share."

After China's accession to the WTO, international auto companies have entered the Chinese market to seize the market. The public has failed to adjust its strategy accordingly. With GM, Toyota, Nissan, Hyundai and other auto giants entering China, the number of new vehicles has increased dramatically, and the price of cars has also been declining. However, the public is still slow in launching new cars.

In 2004, under the background of major auto manufacturers launching new models, Volkswagen's China-made brand new models have only one MPV Touran (the Santana 3000 that was launched this year is only an upgraded version of Santana 2000). In addition, facing the high-frequency price cuts of new and old models of auto companies, the general public insisted that it would rather let the market do not make profits, and ultimately its sales, profits, and market share in China declined during the year. In 2005, the public began to respond, but its market share has fallen below 20%.

Phase II: Volkswagen Adjustment Strategies Market Shares Stopping Down, Stabilizing, and Slightly Increasing In the face of continued sharp declines in China’s market share, Volkswagen has finally been unable to turn a blind eye and since 2005, it has finally made strategic adjustments to the Chinese market. In case the market share continues to drop sharply.

Van Ander, president of China, who had just taken office in 2005, announced the "Olympic Plan" in October. The main contents of the plan are: Volkswagen will increase its focus on the Chinese market, conduct surveys on local customer bases and markets, develop local products, and introduce 10 to 12 new models by 2009; in terms of cost, until 2008 Locally developed products will have a 40% reduction in product costs compared to 2005.

After the adjustment of strategy, from 2006 to 2008, its domestic passenger car sales maintained a steady and rapid growth, and its market share also stabilized and stabilized.

In 2009, Volkswagen also released its strategy for the South, striving to obtain stronger market performance and market position. Its effectiveness has gradually begun to appear. On November 20, 2011, Niu Kaiming, President and CEO of Volkswagen China, stated at the "VW Group China Night": "The strategy of the south is successfully implemented! Our share in the South Market has reached 15.8%. It was 12% two years ago. We also historically achieved the first position in the Hong Kong market."

For the whole year of 2011, according to data compiled by Gasgoo.com, the market share of Volkswagen's domestic passenger vehicles in China is 18.0%, which is slightly higher than that in 2009 and 2010.

In the first half of this year, the growth rate of the auto market in China slowed down again, and the domestic passenger car market slowed down to 8.1%, while the sales of domestic passenger cars in China rose by nearly 20%, and the market share increased to 19.5%. . The main reasons include (but are not limited to):

1. The production capacity has been improved. For example, FAW-Volkswagen's Chengdu Third Plant officially put into production.

2. The fieryness of the luxury car, SUV market and the good performance of the public in the B-class car market. Benefiting from the continuing hot market for luxury cars and SUVs, sales of FAW-Volkswagen Audi A4 and A6 all increased by more than 30%, and sales of FAW-VW Audi Q5 and Shanghai Volkswagen Tiguan increased by more than 50%. With the upgrading of the automobile consumption structure, the high-end market has also shown rapid growth. Volkswagen's B-Class new Passat and New Magotan, which were launched last year, showed rapid growth during the first half of this year.

3. Competitors' poor performance in the market is also one of the main reasons. For example, in the B-class car market, the GM "Shuangjun" and the Japanese top three all performed poorly in the first half of this year.

Note: The mass market share of this article refers to its domestic passenger vehicle market share in China. As the passenger vehicle market still has a small number of imported vehicle sales and exports, the market share shown in this paper is an approximation.