German automaker Volkswagen AG announced yesterday that it expects to sell 500,000 cars in China this year - a 40 percent increase from last year - and hopes to double that figure to one million in 2007.
"We are experiencing one of the greatest increases in sales of vehicles in a single market worldwide ever," Robert Buchelhofer, Volkswagen's Asia-Pacific chief, told a news conference in Shanghai.
"We can already say with certainty that we will reach the half-million threshold this year for the first time," he said. "This makes China Volkswagen's second-largest individual market after Germany."
Volkswagen, the dominant car seller on the Chinese mainland, also said it would introduce a new car called the Gol, which costs "considerably less than 100,000 yuan (US$12,500)."
The car is aimed at first-time private buyers, the most-rapidly expanding market segment in China, as the company bids to boost its market share, Buchelhofer said.
VW's lead is under threat following an increase in investment by its global rivals, particularly Japanese auto giants like Toyota, after China's entry into the World Trade Organization.
The new Gol - which is especially developed for emerging markets and already sells in Brazil - will be built by 17-year-old Shanghai VW, a 50-50 joint venture between VW and Shanghai Automotive Industry Group.
VW started production of its first made-in-China hatchback, called Polo, in its Shanghai venture early this year, in a move to tap the huge potential of the private-car market.
The firm also said it will launch the Polo hatchback next year, as it promises to introduce at least one new model in China annually.
"Private customers in China have finally started to buy cars on a broad scale," Buchelhofer said. "Current market developments indicate that sales figures will double in the next five years, giving us sales of one million vehicles in 2007."
To achieve the goal, the company intends to increase its annual investment in China to nearly 600 million euros for the next five years, a majority of which will be used in the development of new products, he said.
The Germany's largest car manufacturer has invested about three billion euros in China, where it dominates the passenger-car market with its Santana and Jetta sedans.
(eastday.com December 6, 2002)