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Volkswagen China car sales top 700,000 units in 2006

BEIJING – Volkswagen Group China announced on January 9 that along with its two joint ventures, Shanghai-Volkswagen and FAW-Volkswagen, it sold a record 711,298 cars in China and Hong Kong in 2006, up 24.3 percent over 2005.
 
Sales of the Volkswagen brand amounted to 628,807 units (including 6,021 imported vehicles), up 22.8 percent, while those of the Audi brand reached 81,708 units (including 4,486 imported vehicles), an increase of 38.8 percent.
 
With this sales performance, Volkswagen retains its leading position in China’s car market with an estimated market share of 17 percent, maintaining its 2005 share and outpacing rival GM by slightly more than 5 percentage points. China also remained the Group’s second-largest market after Germany.
 
The Hong Kong market, which was absorbed by Volkswagen China’s sales operation in 2006, also achieved sales of over 1,906 cars (Volkswagen: 1,006, Audi: 900), a 28.3 percent increase over the previous year.
 
2006 was a turnaround year for the Volkswagen Group in China, according to Dr. Winfried Vahland, Group president and CEO. In the two previous years the Group’s market share there had tumbled.
 
“Competition in the industry has undoubtedly become much fiercer in 2006; however, we have far exceeded our internal sales targets for 2006 and have met the goal we set for ourselves of stabilizing our market share as a result of our efforts to bring our company towards full customer orientation,” said Vahland. Vahland also indicated that the Group achieved a positive financial result in 2006, without revealing details.
 
Together with its two JVs, Volkswagen has successfully achieved all its major goals for 2006, including the restructuring and repositioning of dealer networks, the differentiation of the two JVs, further cost control, as well as the launch of new market-oriented models, such as the Passat Lingyu, Polo Jinqing and Jinqu, Sagitar, New Bora, Bora HS, Audi A6L and the new Audi A4.
 
In 2007, the Group plans to accelerate its “Olympic Program,” originally announced in October 2005. One of its targets is to realize record sales for 2007 through the launch of more market-oriented products and the introduction of advanced technology to further secure their leading position in the auto market. Shanghai-Volkswagen will launch the Skoda Octavia and FAW-Volkswagen will follow with its new flagship model Magotan. Both models will be fitted with the company’s celebrated direct injection gasoline TFSI engine, representing the latest generation of fuel-use reduction and low emissions technology from Volkswagen, here making its China debut. The Group will also continue its program to optimize the production process in terms of product costs, through further increasing local content.
 
“In 2007 we will focus on securing the quality of the business processes, on sustainable development and an improved sales structure,” said Vahland.

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