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Shanghai Volkswagen may stop making Santana

  From SinoCastMay 18, 2009

Shanghai Volkswagen Automotive Co., Ltd. (SVW) will suspend the production of Santana in 2012, said sources.

As a veteran brand, Santana witnessed the growth of the Chinese automobile market. When Dongfeng Peugeot Citroen Automobile Co., Ltd. (DPCA) suspended the production of Fukang, another earliest domestic nameplate, analysts questioned about the lifecycle of Santana, as well as Jetta, the trademark owned by FAW-VW Automobile Co., Ltd., the other joint venture of Volkswagen in the country.

In 1983, the first Santana rolled off the production line in Shanghai. Till now, its sales has reached 3.21 million vehicles. From January to April 2009, SVW sold 56,012 Santanas, including 16,765 units in April alone, citing the data by the China Association of Automobile Manufacturers (CAAM), indicating that the market still has a strong demand for the car model.

On the strength of advanced technology and high-quality after-sales service, SVW can easily snatch a large market share in China's underdeveloped areas, even without large-scale publicizing and marketing. In the bullish Chinese auto market, SVW sold 190,500 vehicles in the first four months, 30% of which were contributed by Santana.

The company's sales targets of Santana for the following years before 2012 are respectively 86,572 units, 62,640 units, 48,438 units, and 30,437 units. Judging from current market situation, SVW clearly undervalues the market demand.

However, with the advancement of technologies and changes of market demand, Santana is bound to disappear from the market, despite of its high performance and large sales. In the light of the robust performance of Lavida, the top management of SVW believe that they can get large sales without the veteran brand.

Previously, Winfried Vahland, president and CEO of Volkswagen Group China (VGC), said that the auto giant would rely on Lavida and New Bora for a bigger market share in China in the future. Analysts guess that SVW and VGC had considered the retreat of Santana and the debut of Lavida for long.

Even before the debut of Lavida on the market, SVW has kicked off promotions around the country. With a German heritage, beautiful shape, and comfortable driving experience, Lavida is believed to repeat the hesternal success story of Santana in China's medium-class auto market.

SVW plans to sell 90,000 Lavidas in 2009, 93,500 in 2010, 109,000 in 2011, 130,000 in 2012, 139,700 in 2013, 140,100 in 2014, and 142,400 in 2015. In 2012, when the company decides to suspend the production of Santana, its sales target of Lavida surges, indicating that SVW is well prepared to replace Santana with Lavida.

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