FAW Volkswagen declines rapidly in May due to bad management

Gasgoo.com (Shanghai June 15th) – To response recent rumor, FAW Volkswagen announced the data of May, which showed the sales declined by 14.5% YoY. The decrease of FAW Volkswagen in sales had become a fact from February 2015. In accordance with the data from China Passenger Car Association, the sales volume of FAW Volkswagen was 125,240, among which the sales volume of Volkswagen brand was 83,480 and the data of Audi was 41,760 except for imported cars, declining by 22% YoY. The difference between China Passenger Car Association and FAW Volkswagen came from actual sales volume and wholesale volume, which is also the key for auto enterprises to control the sales data. Industry analysts figure out actual sales volume is much lower the data from China Passenger Car Association on the number of license plates registered.

The sales volume of FAW Volkswagen still declined rapidly in May even according to the data from China Passenger Car Association. FAW Volkswagen announced the sales volume was 137,321 in May, among which the sales volume of Volkswagen was 90,151 and the data of Audi was 47,170 including 4,684 imported cars, declining by 14.5% YoY.

In accordance with the data from China Passenger Car Association, the main reason for the decrease of FAW Volkswagen in May was not external. Firstly, although the growth of demand of China auto market was slower, the passenger car market still kept increasing. In May, the sales volume of China passenger car market was 1,485,291, increasing by 4.8% YoY. The total sales volume of passenger cars in China in first 5 months was 7,975,695, increasing by 13.3% YoY. The performance of FAW Volkswagen was obviously behindhand. Secondly, Shanghai Volkswagen, which is in the same Volkswagen brand platform, kept increasing this year. According to the data from China Passenger Car Association, the sales volume of Shanghai Volkswagen in May was 144,008 and total sales volume this year was 807,842, which was the top 1 on the list of China passenger car for 5 months.

As reporter knows, there are 2 main reasons for the decrease of FAW Volkswagen. The first one is the bad management. In 2014, the stock pressure of FAW Volkswagen distributors were quite high due to performance reason. FAW Volkswagen didn't adjust policies according to the situation this year so most distributors chose to sell less cars to avoid losing more money. The second reason is FAW Volkswagen didn't reduce sales price this year as other auto enterprises did, such as Shanghai Volkswagen and Shanghai GM. A senior executive from auto enterprises also said the product structure was another reason.