VW launching new strategy for Chinese market

German automaker Volkswagen AG said Thursday that it is launching a new strategy for the China market, aiming to double its sales by upgrading its brand image and improving customer service.

"We plan to add or renew at least four models per year and double the number of dealerships to achieve our sales target," Winfried Vahland, the Wolfsburg, Germany-based company's president for China, said in a statement issued Thursday.

While most world automakers have reported sales falling amid the global economic slump, Volkswagen reported a new record of 6.23 million vehicles sold in 2008, up 0.6 per cent from the year before.

Sales in China rose 12.5 per cent to 1.02 million in 2008, compared with 1.06 million in Germany, Volkswagen's biggest market. Last year, the company said held a market share of 18 per cent in China, including Hong Kong.

Volkswagen entered China in the mid-1980s, before its biggest competitors, and long dominated the market with its Santana and Audi models. It once claimed a market share of over 50 per cent, but in recent years has ceded ground to an onslaught of competition from international and domestic rivals.

The company has two joint ventures in China - one with the state-owned China FAW Group, or FAW-Volkswagen Automobile Co., and one with SAIC Motor Corp., Shanghai Volkswagen Automotive Co.

Volkswagen intends to double its sales and retain a leading position in China despite the current difficult business climate, Vahland said in introducing the company's "Strategy 2018."

"We have defined a plan to face these challenges and take all opportunities," Vahland said, without giving any details on plans for new investments.

Despite the upbeat plan, Volkswagen's China sales fell 11 per cent to 83,900 vehicles, the company recently reported.