By He Lun, CBU/CAR Guest Columnist
Volkswagen seems to have tided over its DSG crisis judging from its performance in China.
Volkswagen China sales increased by 18.7 percent in the first five months, higher than the 14.7 percent average growth rate for passenger vehicles. Shanghai-VW’s sales in April were up 14.2 percent year-on-year and FAW-VW sales up 15.4 percent compared to the average 9 percent for the industry. Growth rates in May were even higher, 18.9 percent of S-VW and 17.1 percent for FAW-VW while the average was only 13 percent.
Volkswagen’s recall of its problematic vehicles affected sales of its DSG cars in March and April but since then sales have returned to normal. The recall has addressed the DSG defects and there have been fewer complaints.
Despite claims by some experts that the DSG has “an inherent defect” that “cannot be fixed” and “should be discontinued,” Volkswagen seems to have successfully addressed the issue showing confidence in its powertrain technology.
But if such confidence leads to another show of arrogance, the German carmaker may again pay dearly.
Earlier I have pointed out in my article, “BMW & VW: the Reincarnation of Arrogance and Respect,” that Volkswagen China during the time of Winfried Vahland was transformed from arrogance to respect, leading to a peak growth in China sales but warned: “would Volkswagen reincarnate from arrogance to respect and now back to arrogance again?” It seems that Volkswagen has realized such a possibility and is ready to prevent it from happening again.
VW China president Jochem Heizmann recently said that “I have learned a lot” through the DSG incident and comments and criticisms from the Chinese media. “We will no longer wait for decisions from the German headquarters when we run into quality and technology issues with our products,” Heizmann said at a media briefing. “We will utilize our China resources for a fast response. As far as arrogance is concerned, I am only aware of it after I arrived in China. I do not want to represent arrogance.”
Heizmann’s attitude is certainly a progress compared with Volkswagen’s silence towards outcries by Chinese consumers and media over the DSG issue.
I also commend Heizmann’s comment that Volkswagen’s success in China by 2018 is not whether the company reaches 4 million in sales, a goal much hyped so far. “Our success will not be judged by how many new cars we sell or how much profit we make. Our success will be judged by whether we have won over the highest degree of consumer satisfaction, how we would have protected the environment and whether we have fulfilled our corporate social responsibilities.”
But there is still room to be improved as far as Volkswagen China’s attitude towards Chinese consumers and the public.
At a media briefing on the eve of Auto Shanghai 2013 last April, Heizmann expressed in German that VW China “regrets” over consumer inconvenience and troubles due to the DSG problems. The word “regrets” was translated into Chinese as “apologizes.” A Chinese reporter who speaks German pointed out to the wrong translation and criticized VW’s lack of sincerity in the choice of words and Heizmann accepted the criticism. However, during the Volkswagen Evening on the same day, Heizmann repeated the same word “regrets” in English and again the Chinese translation used “apologize.” Chinese reporters who understood English were again disappointed. Heizmann’s failure in correctly understanding the connotation of the Chinese word leaves the media with the impression that he never wanted to apologize.
Another example that shows Heizmann’s lack of understanding of VW’s role in China is his recent announcement that “Volkswagen will invest €9.8 billion in China in the next three years.” The astronautically number includes investment from the two partners in China, but Heizmann said it in such a way that it overlooked the contribution from his two Chinese partners.
At a Volkswagen evening on the eve of Auto China 2006, I was asked by Vahland how I felt about the event. I told him not good. Up on the platform that evening were mostly German executives other than the host, models and performers. The top CEOs of the two JVs present are all Chinese and they should be the heroes. Members of the Chinese media present were probably as uncomfortable as I was. Hearing my comments translated by Molly Yang, VW China director of communications, Vahland became silent at first but started talking about something else.
I could tell that Vahland was not happy. But since then Vahland would always mention his Chinese partners at similar VW events.
Heizmann started his China career having to deal with the DSG and public affairs crisis in less than a year on the job. Although the crisis seems to be over, the road in front of him is long and full of unpredictable problems with China characteristics. An important prerequisite for him to make his China experience a bright spot in his professional career is to come down from the high horse and show enough respect to and earnestly listen the voices of the Chinese consumers, JV partners and the local media. It is not enough to be a representative of an engineer culture. What is necessary is to learn how to communicate with local people. (Rewritten by Wayne Xing based on the author’s blog on auto.sina.com.cn)