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Volkswagen Group China
大众汽车(中国)
Type Division of Volkswagen Group
Headquarters Beijing, People's Republic of China
Number of locations Joint Ventures and wholly owned enterprises in Beijing, Changchun, Shanghai, Chengdu, Nanjing, Dalian and Hong Kong
Area served Greater China
Key people Karl-Thomas Neumann (President & CEO)
Industry Automotive
Products Locally produced cars/automobiles of Volkswagen, Audi and Škoda brand, engines, transmissions and spare parts; Volkswagen Group brands import
Services Automotive financial services
Operating income 774 million (proportionate, 2009)[1]
Employees ~53,000 (2010)
Parent Volkswagen AG
Subsidiaries 14 subsidiaries
Website www.vw.com.cn

Volkswagen Group China (VGC) (大众汽车(中国)) is division of the German automotive concern Volkswagen Group in the People's Republic of China.

Volkswagen Group China enjoys sales of about 1.9m cars (2010) in the Chinese market and is the largest foreign carmaker. The Chinese market is one of the main markets of the Group. Operations of Volkswagen in China include the production, sales and services of whole cars, parts and components, engines and transmission systems, and the sales and service of imported cars. The company's locally manufactured and imported vehicles are sold under various brand names such as Volkswagen, Audi, SEAT, Škoda, Bentley, and Lamborghini in China.

Volkswagen Group China is the largest, earliest, and the most successful international partner in China's Automotive Industry[citation needed]. It started its connection with China as early as in 1978, and has been taking the leading position in the Chinese automotive market for more than 25 years. Its first joint venture in China, Shanghai Volkswagen Automotive Co., Ltd., was established in October 1984. The second joint venture, FAW-Volkswagen Automotive Company Ltd. was established in Changchun in February 1991.

Volkswagen Group China's businessEdit

In 1984, Volkswagen signed a 25-year contract to make passenger cars in Shanghai. Since, at that time, vehicle manufacturers could not own a majority stake in a manufacturing plant, Volkswagen’s venture took the limit of 50 per cent foreign ownership.[2]

Today, the Group has 16 representative companies in the country, undertaking parts delivery and service provision for both customers and industry in addition to vehicle production and import.

By May 2004, Volkswagen Group had concentrated its strengths in the founding of Volkswagen Group China (VGC), which is governed by a six-member management team responsible for the areas of sales and marketing, technology, purchasing, personnel and governmental relations as well as finance. VGC's tasks include supervision of the Chinese associated companies of the Volkswagen Group, and the set-up of new business segments.

VGC companiesEdit

Volkswagen Group, via its Volkswagen Group China division, has 16 subsidiaries in China, with Shanghai Automotive Industry Corporation (SAIC), and First Automobile Works (FAW) being the two major Chinese partner companies.

Shanghai Volkswagen Automotive CompanyEdit

In 1984, a joint venture (JV) was established between Volkswagen Group and Shanghai Automotive Industry Corporation (now SAIC Motor), creating Shanghai Volkswagen Automotive Co., Ltd. (SVW). With its headquarters in Shanghai, equity holdings are split (as of 2010) - Volkswagen AG (40%), Volkswagen (China) Invest (10%), SAIC (50%). This a fixed term venture, of 45 years, running until 2030.[3]

Shanghai Volkswagen Automotive Co., Ltd. (SVW) is the first car-making joint venture since China began its reform, and debut to the outside world, and is located in Anting International Auto City on the northwest outskirts of Shanghai. Producing cars under the Volkswagen and the Škoda brands, SVW currently offers a total of twelve model series. By October 2009, SVW had turned out over five million cars in total, becoming the carmaker that has the biggest population of cars in China.

Shanghai Volkswagen Automotive Company
founding year1984 (production start: 1985)
headquartersShanghai
equity holdersVolkswagen AG (40%), VW (China) Invest (10%), SAIC (50%)
employees 22,000 (31.12.2010)
productsVolkswagen: Tiguan LWB, Touran, Passat New Lingyu, New Passat, Lavida, Polo (hatchback and notchback), Cross Polo, Santana B2, Santana Vista
Škoda: Octavia, Fabia, Superb

Cooperation of Shanghai Volkswagen and Škoda

In April 2005, Škoda officially landed at Shanghai Volkswagen, ushering Shanghai Volkswagen into the dual brand era. In September 2006, Shanghai Volkswagen Škoda – the first Chinese manufactured Škoda - was launched and the Chinese name was announced.

Octavia, the first Shanghai Volkswagen Škoda model, hit the market on 6 June 2007. Octavia is the first of its class that exceeds its international prototype in real sense. Following Octavia's success, Shanghai Volkswagen launched Fabia in 2008 and Superb in 2009.

FAW-Volkswagen Automotive CompanyEdit

Main article: FAW-Volkswagen

Established in February 1991, FAW-Volkswagen Automotive Company (FAW-VW) is a large-scale carmaker jointly funded by China FAW Group subsidiary First Automobile Works, Volkswagen AG, Audi AG and Volkswagen (China) Investment Co., Ltd. It was the first modern car industrial base constructed with an economy of scale in China. With its development over the years, FAW-Volkswagen is producing thousands of vehicles on a daily basis.

FAW-Volkswagen manufactures 9 products of two globally known brands, Volkswagen Passenger Cars and Audi, with advanced technology and equipment. Volkswagen Jetta, New Bora, Golf, Sagitar, Magotan, Volkswagen CC, Audi A6L, Audi A4L and Audi Q5 cars are very popular among consumers. FAW-Volkswagen is a mature production base in China, with a complete portfolio of both A-, B- and C-grade cars.

FAW-Volkswagen Automotive Company
founding year1990 (production start: 1991)
headquartersChangchun/Jilin province
equity holdersVolkswagen AG (20%), VW (China) Invest (10%), Audi AG (10%), FAW (60%)
employees27,000 (31.12.2010)
productsVolkswagen: Jetta A2, New Bora, Golf, Sagitar, Magotan, Volkswagen CC
Audi: A6L, A4L, Q5

Audi at FAW-VolkswagenEdit

Audi AG, with more than 20 years of development experience in China, was the first global premium car brand to realize domestic production in China.

Agreements on the manufacturing of the Audi 100 under license were signed on 13 August 1988, with this date marking the conclusion of negotiations lasting one year. The joint venture agreement included both the technology transfer for the production and planning of the Audi 100, and the setting up of after sales support. Expertise was in addition transferred by providing training for some 500 Chinese workers at Audi in Germany. Furthermore, around 30 Audi employees were posted to Changchun to provide production support.

In November 1993, the then-Board Chairman of FAW and Volkswagen AG, signed a letter of intent on the integration of Audi production and a V6 engine plant into the FAW-Volkswagen joint venture, which had been established at the end of 1991. As a result of the signing of the agreements in December 1995, Audi acquired a 10 percent stake in the joint venture by the name of FAW-Volkswagen Automotive Company Ltd. Volkswagen AG controls 30 percent, with FAW continuing to hold a 60 percent stake.

The first Audi product built by the joint venture, a modified Audi 100 with V6 engine bearing the model designation Audi 200, went into production in May 1996. The Audi 200 remained in production until summer 1999 (facelift of the Audi 100) with 2.6 and 2.4 litre V6 engines and the 4-cylinder, 1.8 litre turbo power unit. The content manufactured locally at the Changchun plant was 60 percent.

Further VGC entitiesEdit

The following are the subsidiary companies which form Volkswagen Group China:

CompanyOwnershipLocation
Volkswagen (China) Investment Company Ltd.VW AG 100%Beijing
Volkswagen Finance (China) Company Ltd.VW AG 100%Beijing
Volkswagen Beijing Center Company Ltd.VW (China) 70%, Automobile Repair Company Beijing 30%Beijing
Volkswagen FAW Platform Company Ltd. (Powertrain)VW 60%, FAW 40%Changchun
FAW-Volkswagen Sales Company Ltd.FAW-VW 99%, FAW 1%Changchun
Volkswagen FAW Engine (Dalian) Company Ltd.VW (China) 60%, FAW 40%Dalian
Volkswagen Automatic Transmission (Dalian) Company Ltd.VW (China) 100%Dalian
Volkswagen Transmission (Shanghai) Company Ltd.VW (China) 60%, FAW 20%, SAIC 20%Shanghai
Shanghai Volkswagen Powertrain Company Ltd.VW (China) 60%, SAIC 40%Shanghai
SAIC-Volkswagen Sales Company Ltd.SAIC 50%, VW (China) 30%, SVW 20%Shanghai
Volkswagen Import Company Ltd.VW (China) 100%Tianjin
SITECH Dongchang Automotive Seating Technology Ltd.Sitech GmbH 60%, Dongchang 20%, Etern 20%Dongchang
Volkswagen Hong Kong Ltd.VW (China) 100%Hong Kong

See alsoEdit

ReferencesEdit

  1. Volkswagen Aktiengesellschaft – Annual Report 2009
  2. Harwit, Eric (2001), "The Impact of WTO Membership on the Automobile Industry in China", The China Quarterly: 655–670, http://www.indiana.edu/~hisdcl/h207_2002/autoindustry.pdf. Retrieved on <time class="dtstart" datetime="2010-09-16">2010-09-16</time>. 
  3. SVW - SVW Introduction

External linksEdit

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