FAW VW to cut sales of low-profit Jetta cars

Shanghai, April 9 (Gasgoo.com) FAW-Volkswagen has started to reduce the sales of Jetta cars which have made low profits, said sina.com today.

In March, FAW VW sold 21,139 Jetta cars, about 38% of the joint venture's total sales in the month. Previously, Jetta contributed more than 40% to the total sales of FAW VW. A distributor said the decline is a result of the carmaker's control of Jetta sales.

The sales plans of FAW VW revealed that its Sagitar and Magotan cars must achieve 35% of the company's total sales in 2009, while the Jetta sales must be less 40%. All distributors and dealers are required to meet the goals. Therefore, the inventory of Sagitar and Magotan cars is much now higher than Jetta's in the dealership.

Dealers said that there are small price cuts or little promotion for the Jetta cars, compared with Sagitar and Magotan.

Volkswagen AG may replace the current generation Santana and Jetta with new car models by 2010. The Jetta model produced by FAW VW in FAW's Chengdu plant has been one of the best-selling cars in China, but the profit is low. The new Jetta will come with a brand new look when it is launched later this year or in early 2010.

FAW VW may start to build its manufacturing base in southwest China's Chengdu city next month. It is the expansion of FAW's current Chengdu plant, which has a capacity of 20,000 units at present and produced 14,000 Jetta cars last year.

FAW VW has agreed to take over the Chengdu subsidiary from FAW Group for 502.35 million yuan ($73.46 million).