VWmangotan.jpgWant to know the secret of Volkswagen's success in China? Try this well-written article by US car buff Anthony Fontanelle.

The piece was written last month, before General Motors disclosed that it is on track to hit 1m sales this year in China, so Fontanelle's prediction that VW, with forecast China sales of 800,000 this year, is “likely to remain the top seller” in China's car market may have been a bit premature.

Nevertheless, the German carmaker's FAW VW joint venture was the top seller in July pipping the US giant's venture Shanghai GM to take pole position in sales. VW's Jetta was also the best-selling model in July.

The article looks at VW's strategy for luring China's more sophisticated car buyers with models such as FAW VW's Magotan sedan (pictured) which was launched last month

The Magotan, which the rest of the world knows as the Passat, follows the latest design philosophy first introduced on the VW Phaeton luxury car.

The new styling is a dramatic departure from the styling of the original Passat, the writer argues, and although the new design is somewhat controversial, sales have improved over the old model.

In fact, the success of the Magotan has hurt sales of the Passat Lingyu, which is made by Shanghai VW, the German carmaker's other JV in China. Shanghai VW, a JV with SAIC, has just announced a 9% price cut on the Passat range to offset the competitive challenge from the rival car.

Presumably, the strategy guys at Volkswagen are, as we speak, trying to work out how they came to have two Chinese ventures that are now selling cars in direct competition with each other.

That minor problem apart, VW says its operations in China are going well and this year it aims to increase its sales by roughly one fifth and maintain its 17% share of the world's second-largest auto market.


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