VW in China (2): mid-term sales/model plans and development structure

VW to introduce 26 new models by 2015 with sales of 4 million a year by 2018

2011/10/05

Summary

 In 2011, VW estimates the sales of more than 2.2 million vehicles in China. The company targets the sales of 4 million a year by 2018. In order to achieve this target, it will invest about 4.6 billion Euros during the five years through 2015, planning to introduce 7 fully-remodeled models and 19 models that it will newly start producing in China.


 In addition, Shanghai VW and FAW-VW each aims to launch a first passenger car under its own brand between 2013 and 2014. Shanghai VW will implement this through joint development of a next-generation new model with VW, and FAW-VW by enhancing development functions including expansion of its own development center.


 The following reports VW's recent activities in China on its medium-term sales plant, development structure, and model plan.

 Concerning VW's recent activities in China on the latest medium-term operation plan and the expansion of production of vehicles and engines, we report in the market report, "VW in China (1): plans to increase engine and vehicle production capacity" in September 2011.

VW Group's sales plan in China (-2018)

Investment plan for launching
new model/expansion of
production capacity
The company will make an additional investment of 10.6 billion Euros in China during the five years from 2011 to 2015 (of which, 6 billion Euros in expanding annual production capacity and 4.6 billion Euros in launching new models and other activities). The net profit of its joint venture companies in China will be used for the investment.
Sales target
*Note 1
 More than 2.2 million in 2011. More than 3 million in the medium run (2013-2014). 4 million by 2018.
Each company's plan is as follows:
* Shanghai VW (VW/Skoda brand): 1.2 million in 2011. More than 1.3 million in 2012. 2 million in 2015.
* FAW-VW (VW, Audi and others brands): 1 million in 2011 (including 300,000 under Audi brand). 1.65 million in 2015 (including more than 1 million under VW brand. More than 600,000 under Audi brand)
* To expand sales in midsize and small cities and surrounding areas.
* To increase marketshare of VW/Skoda/Audi vehicles in the South region (*Note 2) to the level of national average.
Environmental
responsiveness
Effort to improve
fuel economy/
to reduce
emissions
For the time being, the company is to improve fuel economy and to reduce emissions by promoting the downsizing of engines to be used and the expansion of powertrain installation that combines TSI high-performance engine and DSG (dual-clutch version) transmissions.
Efforts on
eco cars
VW Group's efforts:
* The company will gradually introduce models with an idle reduction system/regenerative braking system, HEVs/PHEVs, and EVs; thus, expanding the business for eco cars. It will use an idle reduction system and a regenerative braking system as standard equipment in all models to be marketed in China by the end of 2015.
* The company promotes modularization of HEVs/EVs, aiming to be a leading company in the EV market in China in 2018. Local production of EVs will begin in 2013-2014. Sales target for 2018 is 100,000.
Audi's plan is as follows:
* The company will start to use an idle reduction system and a regenerative braking system in all models to be marketed in China as standard equipment in 2012.
* The company will introduce two full-hybrid passenger cars (the New A6L hybrid and the Q5 2.0T hybrid) in 2013 or later.
* The company will launch an EV model in 2015 or later.
At the Shanghai Motor Show 2011, Skoda announced that it would start local production of HEVs/EVs in the near future as its parent company, VW, does.

Source: VW's strategy for electric vehicles in China (Apr. 23, 2010), Automotive News Europe (Apr. 25, 2011), other various media reports in 2011.
*Note 1. Sales target is estimated by MarkLines based on various media reports.
*Note 2. "South region" includes Zhejiang Prov., Jiangxi Prov., Fujian Prov., Guangdong Prov., Guangxi Prov., and Hainan Prov.



Development structure: VW jointly develops with Shanghai VW next-generation new models while FAW-VW enhances an independent development structure

VW: enhances technical alliance with Shanghai VW

 In April 2011, VW announced a statement on joint development of a C-class high-end passenger car (next-generation new model) with Shanghai VW. Based on VW's MLB platform for longitudinal engines, which includes the latest engine technology, the companies will jointly develop a next-generation new C-class model designed for China.
 At the same time, VW unveiled that it would support Shanghai VW's development of electric vehicles (HEVs/EVs).
 In addition, VW also signed a memorandum of understanding with Shanghai VW on an alliance concerning a next-generation new model that uses the MQB platform for transverse engines.
 The MQB platform modularizes about 60% of components including a transverse engine, transmission, and in-vehicle air conditioner. The company plans to use the platform in multiple new models including the New Polo, Golf, CC, Eos, Scirocco, and Tiguan.

 

Audi: sets up its first design studio in Asia - Audi (Beijing) Design Studio

 In August 2011, Audi started operations of its Audi (Beijing) Design Studio in Beijing. The new design studio is Audi's first design studio in Asia.
 The Design Studio sets up three main divisions, exterior design, interior design and decoration, preparing a structure to be able to meet the needs of consumers in China.

 

FAW-VW: builds an independent development structure for vehicles in 2015

 FAW-VW will enhance the development functions of its own development center "Technology Study & Development Division," intending to build a structure for independent development of bodies in 2012 and VW/Audi vehicles in 2015.
 In order to achieve this, FAW-VW will boost the investment in R&D to more than 200 million RMB a year. It also plans to increase the number of engineers from 742 in July 2011 to 1,130 in 2015.
 Before this, in January 2011, FAW-VW completed the expansion work of "Quality Assurance Measurement Technology Center" at its headquarters in Changchun to start its operations.
 The Center consists of six functional divisions - product development, trial production, product adjustment, product upgrading, product approval, and volume production. The site area is 1,800 square meters.

 

FAW-VW: starts operations of a joint lab with Audi and Tongji University in October 2010

 In October 2010, FAW-VW started operations of Audi-Tongji Joint Lab, which is a joint research center with Audi and Tongji University, at the school building of Shanghai of the College of Automotive Engineering, Tongji University. At the same time, the company held an opening ceremony and unveiled "Dushi Chenguang," an EV concept car that the three entities have been jointly developing.
 "Dushi Chenguang" is an EV concept sedan that is developed by the three entities based on the Audi A6L (the max. cruising range is 130km/full-charge, the max. running speed is 138km/h. The battery can be charged by a household power source). In the development of this model, Tongji University took charge of power system including components and its system integration.

 

FAW-VW: jointly develops electronic technology for new energy vehicles with FAW Group's subsidiary

 In December 2010, FAW-VW signed a contract on joint development of electronic technology for new energy vehicles with Qiming Information Technology Co., Ltd., which is under the umbrella of FAW Group. The companies will establish New Energy Joint Lab, forming an alliance in multiple fields including technical alliance for new energy vehicles/joint development of products and promotion of volume-production.
 The two companies have obtained about 20 patents for invention/practical application in the field of new energies, participating in the formulation of national requirements and laws and regulations in the field of new energies in China.

 

 



Model plan: A total of 26 new models - 18 by FAW-VW and 8 by Shanghai VW - are to be launched

VW Group's joint venture companies' model plan in China (2011-2015)

FAW-VW (FAW-Volkswagen Automotive Co., Ltd.)
Model Launch year Details
2011 2012 2013 2014 2015
Audi A1 (Import
and sale)
July or later  The A1 is a high-end coupe (2-door). It shares the same platform with the New Polo. The company plans to produce the model in Foshan.
 The model to be made in China comes with a TFSI/TDI engine and a 7-speed S-tronic (dual-clutch). The selling price is planned to be 230,000-300,000 RMB.
 The model to be imported comes with a 1.4TFSI engine and a 7-speed S-tronic (dual-clutch).
New A6L
(Model code:
C7)
December
SOP
To be
launched
in Jan.-Mar.
 The New A6L is a fully-remodeled latest version for China of the A6 with a long-wheel base. It comes with an idle reduction system, a 2.0/3.0 TFSI or 2.5/2.8 FSI engine, and a 7-speed S-tronic (dual-clutch). It adopts the MLB platform. The selling price is planned to range from 350,000 RMB.
New Q3
(Model code:
W-66)
(To start
importing
and
selling in
December)
Local
production
 The New Q3 is a high-end compact SUV. It adopts an upgraded version of the PQ35 platform. The company plans to produce the model at the Foshan plant. The selling price is planned to range from 300,000 RMB.
 It comes with an idle reduction system, a 2.0L TFSI turbo engine (2 versions), or a 2.0L TDI diesel engine (2 versions), and a 6-speed MT/7-speed S-tronic (duel-clutch). Engines are all transverse engines.
3rd-
generation A3
(hatchback/
sedan)
(Import
and sale)
2013
or later
 The 3rd-generation A3 is a high-end compact model (A 3/5-door hatchback is available). The company plans to produce the model at the Foshan plant.
 The model adopts the PQ35 platform. In addition to an idle reduction system, it comes with a 1.4/1.8 TFSI gasoline engine or a 1.6/2.0 TDI diesel engine. The high-end model comes with a 5-cylinder 2.5L turbo engine and a 7-speed S-tronic (dual-clutch).
A5 (Currently
imported
and sold)
2013
or later
 The company is considering producing the A5 at the Foshan plant.
Audi EV 2015
or later
 The Audi EV is the first Audi EV to be made in China.
VW New Magotan July  The New Magotan is the latest version designed for China (B-class sedan in China). The company plans to produce the model at the Changchun plant. The 2011 sales target is more than 40,000. The selling price is 199,800-334,800 RMB.
 It comes with a 1.4/1.8/2.0 TSI or 3.0L V6 FSI engine. It adopts the PQ46 platform.
Sagitar
(Model code:
NCS)
August  The New Sagitar is the latest version of the Sagitar. The company also plans to produce the model at the Chengdu plant.
Jetta NF
(tentative name)
October  The Jetta NF is the latest version of the fully-remodeled Jetta (A-class in China). It comes with an EA211 engine. The local-content ratio is 98%. The company plans to produce the model at the Chengdu plant. (Production of the former model will be discontinued in 2012).
New Bora 2012
or later
 Based on the current Bora, FAW-VW is currently developing the New Bora independently.
F-11
(Model code)
August  The F-11 is the first VW model to be manufactured at the Foshan plant.
Golf A7 (Import
and sale)
2013
or later
 The Golf A7 is the 7th-generation model of the Golf. The company is currently considering producing the model at the Foshan plant.
Jetta EV 2013
or later
 The Jetta EV is an EV sedan based on the Jetta.
Golf
blue-e-motion
within 2013  The Golf blue-e-motion is an EV sedan.
Bora
blue-e-motion
2013
or later
 The Bora blue-e-motion is an EV sedan that is currently being developed based on the Bora (dubbed "e-Bora").
SEAT Leon (Import
and sale)
2013
or later
 The Leon shares the same platform "PQ25" with the Polo. Depending on the volume of sales, the company will shift from import and sale to local production. The model comes with a 1.2/1.4/2.0TSI engine.
Ibiza ST (Import
and sale)
2013
or later
 The Ibiza ST is a compact car (A0-class in China). The model shares the same PQ34 platform with the former Golf. It comes with a 1.2L 3-cylinder engine or a 1.4/1.6L 4-cylinder engine and a 5-speed MT/7-speed S-tronic (dual-clutch). Depending on the volume of sales, the company will shift from import and sale to local production.
Kaili
own-brand
Kaili EV sedan
(Model code:
"FV7002")
Launch  The Kaili EV sedan is the first model (EV sedan) of "Kaili" brand - FAW-VW's own brand that it is currently developing based on the Bora.
 The model comes with a lithium-ion iron phosphate battery set with a capacity of 20kWh/60Ah and a drive permanent magnet synchronous motor with max. output of 42kW/max. torque of 160Nm. The total vehicle weight is 1875kg. The cruising range is up to 150km/full-charge. The electricity consumption is 15kWh/100km. It takes 10 minutes to charge 80% quickly.
Shanghai VW (Shanghai Volkswagen Automotive Co., Ltd.)
Model Launch year Details
2011 2012 2013 2014 2015
VW Passat
(Model code:
"NMS")
April  The Passat is the latest model of the Passat designed for the US. It uses the PQ35 platform. The selling price is 218,800-310,800 RMB.
Santana NF
(tentative name)
(Model code:
VW253 CS)
September  The Santana NF is a new model of the fully-remodeled Santana (A-class in China). The model uses VW's PQ34 platform. The accumulated total sales by 2020 is planned to be 2.4 million (including 60,000 in 2012 and 220,000 in 2013).
Lavida
blue-e-motion
2013
or later
 The Lavida blue-e-motion is an EV sedan that Shanghai VW is currently developing based on the Lavida. The max. output and max. torque of the drive motor is 85kW and 270Nm, respectively.
Next-generation
passenger car
(C-class in China)
2013
or later
 The model is a high-end passenger car (C-class in China) that VW and Shanghai VW jointly develop. The model uses the MLB platform for longitudinal engines, which the Audi A6 also uses.
Next-generation
passenger car
2013
or later
 The model is a next-generation new passenger car that VW and Shanghai VW jointly develop (In April 2011, the companies signed a memorandum of understanding.) The new model uses the MQB platform for transverse engines.
Skoda Yeti Launch  The Yeti is a compact SUV. The model shares the same PQ35 platform with 6th-generation Golf. The company plans to start producing the model at the Yizheng plant in 2013.
SK251
(Model code)
2013
or later
 The SK251 is a global car (A-class in China) that is ranked between the Superb and the Fabia. The model is developed based on a concept car, Vision D, jointly by Skoda and the development center of Shanghai VW. The model is produced at the Yizheng plant. After the launch of the Yeti, the SK251 is scheduled to be produced and sold.
Tantus
own-brand
First model under
Shanghai VW brand
2013
or later
 The model is Shanghai VW's first own brand passenger car (HEV/EV).

Source: VW Group's press release and various media reports

 



Other: Audi plans to establish a new exclusive joint sales company while it enters the used car business

Audi: establishes a new joint dealer exclusive for Audi vehicles with FAW Group

 Audi plans to establish with FAW Group a new fifty-fifty joint sales company for Audi vehicles - "FAW Audi Sales Co., Ltd."
 In addition, Audi is currently considering a capital increase in FAW-VW by 9%. If this is realized, FAW-VW's capital ratio will shift from the current 60% by FAW Group, 30% by VW, and 10% by Audi to 51%, 30%, and 19%, respectively.

 

Used car business: VW forms an alliance with a major import company in China, establishing a wholesale distribution center in July 2011

 VW formed an alliance with China Automobile Trading Co., Ltd. and opened VW Second-hand Cars Wholesale Distribution Center in July 2011, thus starting the used car business in China. The company gives assurance of one year or 25,000 km.

 


(Reference)

VW Group's sales of each model by joint venture companies in China
(unit)
Model 2007 2008 2009 2010 January
- June
2010
January
- June
2011
2011
(planning)
Jetta 201,131 202,303 224,857 224,523 111,132 116,181 A total of 700,000
VW brand cars
Bora 58,613 43,602 15 - - -
Golf (the former model) 4,769 3,576 1,403 1 1 -
Golf A6 1.4T - - 4,057 33,060 15,953 21,726
Golf A6 1.6 - - 1,735 20,733 8,782 19,057
Golf A6 2.0T - - 23 3,724 1,743 2,107
Sagitar 1.4T - - 8,648 52,178 28,267 23,849
Sagitar 1.6 49,409 58,469 74,206 55,317 28,087 34,538
Sagitar 1.8T 7,755 3,119 5,016 5,392 3,151 1,895
Sagitar 2.0 17,181 13,868 10,842 - - 2
Magotan 1.4T - - 15 14,841 7,640 15,207
Magotan 1.8T 26,522 41,274 51,884 51,396 27,138 14,788
Magotan 2.0 713 6,919 - - - -
Magotan 2.0T - 4,313 15,119 12,622 6,495 5,140
Magotan 3.0T - - - - - -
New Bora 1.4T - - 24 25,074 4,283 15,567
New Bora 1.6 - 12,283 118,393 145,835 70,982 78,475
New Bora 2.0T - 3,346 5,940 1,628 1,626 -
Passat CC 1.8T - - - 17 - 6,890
Passat CC 2.0T - - - 17,336 1,133 11,178
Caddy 1.6/1.8 3,076 45 - - - -
Audi A41.8T, 2.4/3.0 19,562 19,731 - - - - A total of 300,000
Audi brand cars
including over
110,000 Audi A6L.
Audi A4L 1.8T - - 3,530 3,829 1,776 2,745
Audi A4L 2.0T - - 37,232 54,582 24,354 33,780
Audi A4L 3.0 - - 216 55 31 13
Audi A6 (C5)1.8/2.4, 1.8T 702 - - - 702 -
Audi A6L 2.0T 29,762 33,861 40,770 47,376 24,164 25,858
Audi A6L 2.4 34,220 36,611 49,440 49,941 25,290 17,566
Audi A6L 2.8 0 10,097 11,254 11,113 5,196 5,122
Audi A6L 3.2 7,401 4,676 59 - - -
Audi A6L 3.0 246 515 2,455 4,353 2,479 1,861
Audi A6L 4.2 307 345 - - - -
Audi A6L 2.7 - - 2,047 2,570 1,893 165
Audi Q5 - - - 32,483 9,405 22,409
Total(FAW-VW) 461,369 498,953 669,180 869,979 411,703 476,119 1,000,000
Santana 3000 97,048 90,400 - - - - unspecified
Santana Vista - - 97,186 111,781 47,122 56,937
Santana 1.8 102,924 105,999 108,425 98,187 42,895 56,627
Santana Wagon 1.9 3,162 1,536 37 176 176 -
Passat 1.8T 5,552 6,543 903 - 49,307 34,467
Passat 2.0 6,211 4,846 1,037 - 17,258 12,569
Passat 2.8 - - - - 608 199
Passat Lingyu 1.8T 82,504 71,777 80,114 89,830 49,307 34,467
Passat Lingyu 2.0T 23,742 16,253 29,363 39,749 17,258 12,569
Passat Lingyu 2.8T 2,453 1,483 1,822 1,392 608 199
New Passat 1.4T - - - - - -
New Passat 1.8T - - - - - 11,150
New Passat 2.0T - - - - - 5,449
Polo 2box 1.4/1.6 40 - - - - -
Polo 3box 1.4/1.6 371 - - - - -
Polo Jinqing 1.4 41,057 33,633 43,063 32,204 14,468 4
Polo Jinqing 1.6 14,551 7,719 23,187 33,653 14,725 3
Polo Jinqu 1.4 25,082 20,957 31,921 24,906 9,647 16,843
Polo Jinqu 1.6 9,331 5,600 8,130 15,013 6,780 5,091
New Polo Jinqing 1.4
(the 5th generation)
- - - 3,948 - 31,869
New Polo Jinqing 1.6
(the 5th generation)
- - - 4,229 - 23,689
Cross Polo - 6,581 7,917 11,882 4,950 161
Gol 2/4door 8 - 16 - - -
Touran GP 20111.4T - - - 2,187 - 12,148
Touran GP 1.8T 5,817 8,148 9,362 7,344 4,085 286
Touran GP 2.0 4,769 3,880 10,725 12,506 8,755 354
Tiguan 2WD 1.8 - - - 20,175 6,057 14,976
Tiguan 4WD 1.8 - - - 27,546 8,408 27,817
Tiguan 4WD 2.0 - - - 22,734 7,578 19,771
Lavida 1.4T - - 424 28,866 4,699 20,901
Lavida 1.6 - 36,455 120,393 191,223 93,700 96,953
Lavida 2.0 - 7,937 25,638 31,526 20,778 13,772
Octavia 1.6 12,299 36,434 63,469 78,201 36,983 40,083
Octavia 1.8T 10,851 10,981 10,365 5,934 3,863 2,210
Octavia 2.0 8,652 12,084 8,838 8,312 5,781 8,959
Octavia 2.0T - - - 1,066 - 888
Octavia 1.4T - - - 19,713 4,058 10,408
Fabia 1.4L - 494 19,493 23,752 11,277 15,052
Fabia 1.6 - 347 11,786 15,526 7,707 10,379
Superb 1.4T - - - 4,667 1,158 6,114
Superb 1.8T - - 10,533 28,788 15,209 18,959
Superb 2.0T - - 4,091 4,341 2,647 1,763
Total (Shanghai VW) 456,424 490,087 728,238 1,001,357 517,852 624,086 1,200,000
Grand total
(including export)
917,793 989,040 1,397,418 1,871,336 929,555 1,100,205 2,200,000
(Notes) 1. As for Model, "Sagitar 1.4T" means "a model with a 1.4-liter turbo engine." The same applies for the following.
2. As for Model, "Audi A4L 1.8T" means a model designed for China of a longer-version Audi A4 with a 1.8L turbo engine.

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