Lavida to bring hope and benefit to auto JVs

CHINA'S first car model owned by a joint venture hit the market on June 25, marking a major step by joint ventures toward increasing their competitiveness in the world's second-largest market.

Shanghai Volkswagen, the venture between Volkswagen and Shanghai Automotive Industry Corp, Wednesday rolled out the first locally designed Lavida sedan. The Lavida, which means life and hope in Spanish, will be equipped with a 2.0 or 1.6-liter engine and priced at 112,800 yuan ($16,430) to 149,800 yuan.

The car will be used for VW's Olympic fleet, and another 2,008 Lavida cars, specially designed for the Beijing Olympic Games, will also be available.

Joint ventures in China, struggling in a highly competitive market, have been speeding up the development of self-branded models, aiming to sharpen their competitive edge by meeting local tastes.

Frank Brustmann, vice president and executive director of Volkswagen Brand, told Shanghai Daily that Lavida will take on an important position in Volkswagen's global product strategy with both global technology and local designs.

Shanghai Volkswagen said Lavida was developed under a new concept of using various functional modules.

As the first VW-branded mid-class sedan, Lavida will allow Shanghai Volkswagen to have a stronger say in the most competitive market segment and boost sales with its fast expansion. The Lavida is expected to rival GM's Excelle, Peugeot Citroen's Peugeot 307 and Toyota's Corolla in the Chinese mainland.

"A-segment is the biggest market in China which will increase further," Brustmann said. "This will give us an incredible chance for the car and we are sure the model would be the most successful car in the SVW model range," he added.

Pre-sales of Lavida have exceeded 30,000 orders since the car made its debut at the Beijing Auto Show in April this year. Shanghai Volkswagen aims to lift its sales by 20 percent to 525,000 this year with the launch of new models.

It will also locally make the Fabia compact car under VW's Czech Republic brand Skoda later this year.

The launch of the Lavida also came after the Chinese central government called on domestic car makers to enhance their research and development strength for not only expanding overseas but also for the sake of its own auto industry.

Guangzhou Honda unveiled its Linian concept car earlier this year as its first self-owned model.

Linian, which the company says means ideal and faith, will be produced from 2010 along with other models in a complete product range in China's mainland market.