VW celebrates good news at Shanghai show

Volkswagen (VW) CEO Martin Winterkorn admits that he's not patient enough, and always wants to hear the bad news first rather the good news. At the Shanghai Auto Show on April 20, the news was all good.
 
Mr. Winterkorn revealed that VW had signed an agreement with Sanyo and Toshiba for joint battery production. VW will be cooperating with Chinese carmaker BYD, which will soon be sending workers to VW's headquarters to introduce and show its technology.
 
VW China President and CEO Winfried Vahland believes the lowest point on China's auto market has passed. Since the second half of January, when the Chinese government released its stimulus policy for the auto industry, consumer confidence has been greatly boosted. VW's sales in the first quarter reached a record high. In March, company's sales volume for its three principal brands, Volkswagen, Audi, and Skoda, all reached historical highs. VW China has expanded its plans for annual sales in China by 50,000 cars, as China has become the firm's second largest market.
 
VW highly values brand strategy. Last year Scania, a major maker of large trucks, buses, and diesel engines based in Sweden, came under VW management. Mr. Winterkorn said VW has long operated a multi-brand strategy and has expanded its brands from four to, now, nine. Each of the company's brands has its distinctive characteristics. For example, Audi focuses on advanced technology, while Skoda emphasizes charm and efficiency. Each brand has its own R&D center and sales and marketing department.
 
Volkswagen plans to sell at least 2 million cars annually by 2018, though its annual production capacity now is at most only 1.3 million cars. Mr. Winterkorn said that in future VW's cars would be produced at four existing bases, in Changchun, Shanghai, Nanjing, and Chengdu. Volkswagen bought into a car factory Nanjing last year and another factory in Chengdu this year, both from SAIC. VW hopes to increase its production ratio by 10% every year.
 
VW's performance in China gives a boost to its confidence in its efforts to overtake Toyota as global Number One. For the first 3 months of this year, the of VW's sales have surpassed Toyota's. In 2004, Toyota looked to overtake General Motors at the top, but two years of losses had it struggling in 2008. Then VW's plans to replace Toyota went awry in the world economic meltdown. But Martin Winterkorn emphasizes that, "In the first place the difficulties are not going to change our plan, our long-term strategy until 2018, in particular. We are now just on track."