Summary of Key Points
This is an in-depth analysis from the leading domestic platform Huxiu, which focuses on industrial innovation and in-depth business reporting. The analysis is specifically about Volkswagen China, a model case that is of great concern regarding the transformation of joint-venture automakers. The interview with senior management provides a direct response to the common questions from the market: How has Volkswagen, a long-established foreign automaker that used to profit significantly by selling gasoline vehicles in the Chinese market, come up with a real strategy to regain its market share in the era of new energy vehicles, after being outperformed by local brands?
---
Detailed Interpretation of Each Point
1. Why Choose Huxiu for the Interview?
The essence of this move is that Volkswagen has decided to abandon the traditional approach of “showcasing achievements to foreigners” and directly address the core Chinese consumers. Many people may not have noticed this detail: In the past, when foreign automakers’ Chinese executives were interviewed, they would usually choose traditional automotive media, focusing on topics like global sales figures and safety standards, which were meant for their headquarters and investors. This time, Volkswagen chose Huxiu, a technology media that caters to a young audience (mostly around 30 years old) and is well-versed in the internet and new consumer trends. This indicates that Volkswagen has realized that today’s consumers are no longer impressed by claims of “German heritage and global standards.” By speaking directly to users who understand the internet and new market dynamics, Volkswagen is sending a clear message: “We truly recognize the changes in the market; we’re not here to deceive anyone.”
2. The Most Critical Signal from the Interview: Volkswagen China No Longer Has to Wait for Approval from Germany
The poor sales of Volkswagen’s electric vehicles in the past three years were not due to issues with the vehicle’s chassis or basic technology. The real problem was that the Chinese division’s decisions were not being respected by the German headquarters. For example, when Chinese users requested a car-mounted version of WeChat, the German engineers dismissed the idea as unsafe, and the feature was never implemented despite years of deliberation. Similarly, when Volkswagen wanted to use cheaper domestic battery manufacturers, the headquarters insisted on using German suppliers, resulting in higher costs. With the CEO’s statement in this interview, it seems that the Chinese division now has the authority to make decisions regarding product improvements, supply chain choices, and additional features without waiting for German approval. This move could significantly speed up Volkswagen’s response to market changes and potentially allow it to catch up with local competitors.
3. Volkswagen’s Future Strategy: Abandoning the “Arrogance” of a Joint-Venture Brand and Competing on Cost-Effectiveness
Volkswagen’s ID series of electric vehicles, which were priced in the millions and featured outdated technology, failed to attract consumers. In the future, Volkswagen plans to leverage China’s domestic supply chain, choosing the most mature and cost-effective solutions for batteries, car chips, and intelligent driving systems. This could reduce overall manufacturing costs by 25%-30%. For the domestic market, where vehicles priced between 150,000 and 250,000 yuan are most popular, Volkswagen’s new models will no longer carry a “brand premium” and will compete on the same terms as domestic new energy vehicles, with more competitive prices.
4. Direct Benefits for Consumers
All joint-venture automakers will be pressured to improve their product configurations and lower prices. As the “leader” in the joint-venture sector for decades, Volkswagen has set the pricing standard. If Volkswagen reduces prices and improves configurations, other brands like Toyota and Honda will be forced to follow suit. This shift will result in consumers getting more value for their money, whether they choose domestic or joint-venture vehicles.
5. A Major Signal for the Industry
The Chinese automotive market has become a benchmark for global automakers. In the past, being a global leader meant success in China; however, this no longer holds true. Now, only those automakers that adapt to Chinese market rules and consumer needs can thrive. Volkswagen’s willingness to engage with Chinese media, delegate authority to its Chinese division, and use domestic supply chains acknowledges that China’s new energy vehicle models represent the most advanced technology. To succeed globally, automakers must first pass the test of the Chinese market.