Moving Forward in China (3)

In Europe we’ve been busy sending the ID.3 to dealerships and preparing our fantastic sales network for a wave of customers in September. However, in China, we’re skipping this step and leapfrogging instead to the next member of the ID. family: the ID.4, our first fully electric SUV. Let’s take a look what’s has been happening in China.

During 2017, it became apparent that the Volkswagen brand was at a standstill in China, our most important market. Our market share was stable at best, but actually on the brink of declining. Our brand indicators and our reputation were beginning to slide, we lost the lead over our key competitors, and there wasn’t enough differentiation to other volume brands. Something had to be done. Together with our Chinese Volkswagen team and both JV partners, we decided on a three-year brand action and investment plan to sharpen the focus on our brand DNA. This 360-degree Move Forward initiative is intended to shape the years – and our success – to come. We identified four areas for improvement and defined a strategy:

1. Revamp the portfolio, mainly with SUVs and cross-overs
2. Start an electric offensive aimed at achieving volume leadership in the new segment by 2023
3. Focus on technology in terms of connectivity, assistance systems, and digital gadgets in the car
4. Design – away from one universal, global brand identity to vehicle personalities and China-specific models and designs

The Move Forward initiative kicked off with our Generation SUV event in Beijing. This centered around several joint product launches with our JVs, and was designed to demonstrate the power of the brand in China. We introduced an impressive four world premieres at this single event alone, and have been consistently pushing the envelope with our Move Forward initiative ever since.

In the following months, we launched similar joint initiatives for our future electric car line-up, as well as a complete restyle of the brand CI/CD and creative work in line with our global New Volkswagen initiative. Starting in 2020, both joint ventures invested heavily in New Volkswagen facelifts for their respective dealership networks. The transformations are to be finished by 2021 and will ensure that the networks in question become the most innovative and modern in our brand.

(New Showroom FAW-VW) )

Our product offensive is continuing to run at full speed. We launched three new products in H1: the Viloran, the Tayron GTE, and the VS7 under the JETTA brand. And we have just announced the launch of the Tayron X, the Golf 8, and the CEE Shooting Brake. We are also renewing some of our existing models such as the CC PA. And of course there is the new plug-in hybrid Touareg. We have made great strides in terms of design, with a fresher, younger, and more modern look that appeals to our aspiring customers in China.

But let’s focus on the SUV bit of this story. The Volkswagen brand is the number one SUV brand in the Chinese market, with a 8.9% share of this segment. Volkswagen has the largest SUV portfolio in China, with ten models including the new Tayron X. Both of our JVs now have a full SUV portfolio, with even more to come, mostly developed in China for China.

In the first half 2020, we consolidated our leading position in this segment, which is growing continuously in China. It is the key pillar of the Move Forward initiative. Our SUV share grew further to 30.8% of the brand’s total sales compared to 22.8% last year.

We also want to play a significant role in shaping China’s e-mobility landscape with our broad and attractive range of NEVs, high-volume vehicles and e-infrastructure. In the first half of 2020, the Volkswagen brand was ranked No. 4 by NEV market share (5.8% YTD), up from No. 9 in the first half of 2019. By the end of 2020, ten new NEVs will have been launched, taking us to a total of 25 NEV models on the Chinese market, including ten BEV models.

Our Chinese customers want SUVs. And they want electric mobility. This is why I am particularly excited to bring the ID.4 to the Chinese market very soon. It combines the best of both words: a powerful SUV with emission-free fun.

The ID.4 takes full advantage of the benefits of the modular electric drive matrix: the vehicle’s front end is short, the wheelbase long and the vehicle interior is astonishingly ample. During its development, we paid particular attention to aerodynamics. For an SUV, the ID.4 is very streamlined. This looks good, reduces air resistance, and allows for more range. The ID.4 can travel up to 500 kilometres without stopping to charge. It also offers the classic SUV advantages: comfort, high seating position, great visibility. We will sell this car worldwide – and we will produce it worldwide, too. In the USA, in China and in Europe. And just like its little brother, the ID.3, the ID.4 is clean, sustainable, and taking the MEB mainstream.

Our MEB platform-based vehicles will start production in Anting and Foshan in October 2020, with first deliveries to customers in early 2021. We will launch two more electric cars in China in the second half of 2020. By 2023, we plan to have 10 different ID. models in China.

Before we close, let’s look at the big picture. By 2025, our Group expects around 1.5 million NEV deliveries annually. The Volkswagen Group projects a production volume of 26 million BEVs worldwide by 2029 – with more than 50% of these coming from China. By 2035, NEVs should represent 50% of total deliveries.

I think this is a promising outlook. And we are proud to be part of the most exciting transformation our industry has ever experienced. We are well on our way to emission-free mobility. Join our movement!