Volkswagen /view/29823.html
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Reasons for separation:
Popular divergence
The unification of North and South Volkswagen, the integration of two channels and the localization of parts have become the shackles of German Volkswagen in China market.
The fact that the north and the south are not harmonious seems to have found the most powerful evidence.
On August 8th, Shanghai Volkswagen announced the price reduction of all models (except POLO), with the highest price reduction range of 14%. On the 9th, FAW-Volkswagen announced in Beijing that it would not adjust the price system, and said that it was completely independent of Shanghai Volkswagen and had no prior knowledge of Shanghai Volkswagen's price reduction strategy.
At this point, the illusion that the public hopes to stop the downward trend of China through the integration of the north and the south has come to an abrupt end, and the bane of the serious separation between the north and the south has been planted more than ten years ago.
The scourge of bigamy
1985 In March, German Volkswagen and SAIC jointly assembled Shanghai Volkswagen and officially entered China. In the joint venture company, the contribution ratio of China and Germany is 50% each, which is the first in China. But at that time, the German Volkswagen was not the only one aiming at the China auto market.
1987 10, Chrysler signed a contract with faw to produce a 2.2-liter engine, and promised to hand over the complete dodge 600 to faw one year later. This makes the public who are bent on occupying the China market feel threatened. Previously, the public also showed "disloyalty" attempts. As early as the initial stage of Shanghai Volkswagen, German Volkswagen President Hahn had the idea of cooperating with FAW. "This is the automobile production base in China," Pi Xi, president of Volkswagen, said at the time.
At this time, an opportunity appeared. 1988, Chrysler found that the Dodge 600 was still very popular in the United States, so it decided to postpone giving it to China for one year, and at the same time raised the promised equipment price, which made FAW furious. Volkswagen discovered and seized the opportunity to make a fortune in China. It not only promised not to pay a penny, but also provided a car chassis and a whole car on the basis of Chrysler engine in the United States. It took only 1 month to assemble an Audi prototype with Chrysler engine, and invited Geng, the then FAW boss, to see it. This is the first prototype of the later "Little Red Flag".
1In August, 1988, FAW and Volkswagen signed the "Little Red Flag" cooperation contract in the Great Hall of the People. In this contract, the far-sighted Volkswagen also succeeded in "pointing to the belly": if FAW produces cars on a large scale in the future, it must cooperate with Volkswagen, and the two sides agreed that "Golfa3" (Jetta) was the first cooperative model, which laid the foundation for the birth of FAW-Volkswagen later.
1990 faw-Volkswagen 15000 joint venture car project signing ceremony was held in the great hall of the people. In July, 1996, the project was put into full operation.
After Volkswagen cooperated with SAIC, some episodes began to appear. According to industry sources, SAIC had hoped that Volkswagen could add two new production lines, but for various reasons, Volkswagen finally failed to meet SAIC's requirements, which made SAIC very unhappy, and therefore turned its energy to cooperation with General Motors.
The actions of Volkswagen and SAIC to find "new love" respectively actually laid a crisis for the later development. The focus of Volkswagen's subsequent investment in China shifted from south to north. On September 6th, 1999, Audi A6, the first domestic limousine, rolled off the production line at FAW-Volkswagen. At present, Audi has a 44% share in the luxury car market. On August 23rd, 200 1 year, the first intermediate car Bora rolled off the assembly line. On May 9, 2003, the golf cart was off the assembly line in the company. On July 15, on the occasion of the 50th anniversary of FAW Group, the golf car was officially listed in China. The models launched this time are 1.6LVV, 1.6LVV, 1.8L5V, 2.0L2V On February 7, 2004, 65438, FAW-Volkswagen No.2 Factory was officially completed and put into operation.
Although Volkswagen has always emphasized the brand differentiation layout of the two joint ventures, Audi, Bora and Jetta of FAW-Volkswagen are above Passat, POLO and Santana of SAIC-Volkswagen respectively.
In addition to the localization of products, Shanghai Volkswagen is also obvious in personnel construction. Only the marketing link is still guarded by Germans, which actually shows the weakening of German support for Shanghai. In 2004, Volkswagen revealed that it would build the fifth factory of Shanghai Volkswagen in Shanghai Lingang. After the completion, the first-phase production capacity of the fifth plant will be 6.5438+0.5 million vehicles, and the second-phase project will be 300,000 vehicles. However, according to the reporter's investigation, at present, the project of the fifth factory of Shanghai Volkswagen has not yet started. Recently, Volkswagen invested 6,543.8+billion yuan in Beijing, specifically for after-sales service support. This also seems to explain the public's indifference to the south.
North and South Volkswagen have formed two independent networks in parts procurement and sales. Perhaps from the beginning, the German public didn't want to integrate them.
Surprisingly, the cooperation between Volkswagen and FAW is not satisfactory.
In order to ensure the quality of automobiles, Volkswagen adopted a strict control strategy for technology research and development in Changchun FAW. FAW has no right to change all Volkswagen products, and all problems encountered in the process of localization must be recognized by the public. In fact, the debate about whether to adhere to Volkswagen's global quality standards has never stopped since the factory was established.
New products are the lifeline of automobile enterprises. However, the products sold by FAW-Volkswagen are obviously not their own products, but products of Volkswagen or Audi. There are only two ways to obtain new products outside the contract: one is to pay for the production license, and FAW-Volkswagen paid 200 million yuan for the production license of Audi A6; Second, make compromises in daily management, such as increasing the salary of German managers, increasing the proportion of German managers, and allowing German personnel to manage the departments under the Chinese management authority in the contract, such as purchasing and sales.
All this means the loss of China's interests at the negotiating table. "The German Volkswagen is a businessman who always wants to make more and more money, so he wants to run a sole proprietorship and a holding company. There is no doubt that these are extremely normal psychology. " A senior official of FAW Group said, "The problem is that at the negotiating table, China often has no weight, because when it comes to subsequent models, China has nothing to say."
It is precisely for the sake of improving the right to speak that FAW chose to cooperate with Toyota in 2002, which is tantamount to a blow to the German public. This made the public turn their attention to the Shanghai public. A typical example is that Volkswagen, SAIC and FAW jointly established Shanghai and Dalian engine factories respectively, and the brand-new Skoda brand plan finally fell under the banner of Shanghai Volkswagen.
It is reported that the brand will be introduced into the China market at the end of this year, which is a big move of SAIC Volkswagen. Compared with other Volkswagen brands, Skoda's brand image is younger and more dynamic, which largely complements the mature and stable characteristics of Shanghai Volkswagen's existing product line.
But the question is, can immediate emergency actions restore the advantages lost in the past?
Localization of parts is difficult.
Goldman Sachs and McKinsey & Company have pointed out that the procurement cost of local parts, which has accounted for 60%-80% of the operating cost of Volkswagen's two joint ventures in China, remains high, which is more than 50% higher than that of developed countries.
The localization rate of Shanghai Volkswagen is quite high, but the localization rate of high-end cars like Passat is not high. The import of important parts has increased the burden of Shanghai Volkswagen and weakened its competitive advantage. According to the disclosure, the price of parts and components given by German Volkswagen to Shanghai Volkswagen is generally 30% higher than the international level. Passat is the main product of Shanghai Volkswagen, and all engines are imported.
Due to historical reasons, Volkswagen's North-South joint venture has its own independent parts procurement system, while Volkswagen in Germany has its own part of the outsourcing parts supply system.
There is a view that Volkswagen's global procurement is a cover for making more profits for it. "The profit from selling imported parts to China every year can account for more than 30% of the annual profit of Volkswagen (China) Investment Co., Ltd. ... The benefit that Volkswagen gets from parts outsourcing is the fundamental reason for its vigorous advocacy of global procurement." A professional who used to work for Shanghai Volkswagen and asked not to be named said.
For a long time, the price system of German Volkswagen on imported parts, especially high-value products, is not very transparent. At the same time, many parts of Volkswagen are sold to domestic joint ventures at higher prices on the basis of European prices. The 30% fare increase is not a number that surprises people in the industry.
Among the models jointly produced by Volkswagen in China, Santana and Jetta have the highest localization rate, but the profits of these two cars are meager. And those models with low localization rate and high price are the main sources of profit for Volkswagen in China.
In those cars, a considerable number of high-value parts depend on imports. The high price of these parts is an important reason for the high cost. FAW-Volkswagen purchases10 billion yuan of spare parts from German Volkswagen every year.
At present, the two joint ventures of Volkswagen in China are facing difficulties in operation, and cost reduction has become their main goal. However, as we all know, localization can not be completed soon, especially for high-value and high-tech parts. Under the pressure of loss, forcing the Germans to reduce the price of parts will become the most feasible way to reduce the cost of FAW at present. However, in the face of the strong German Volkswagen, FAW's idea may only stay on paper.
Channel duplication
Idealists believe that Shanghai Volkswagen and FAW-Volkswagen can integrate their respective distribution networks and become the largest automobile sales platform in China. But in fact, due to the interests of China, the cost paid by these two networks for German Audi AG is greater than the synergistic effect of the two networks.
In June 2002, the imported car business department of Audi ag (China) Company was formally established. Volkswagen has three non-overlapping sales channels in China: FAW-Volkswagen's sales company, SAIC- Volkswagen's sales company and imported car dealers. Jia, chief analyst of Beijing Automotive Industry Development Research Institute, believes that a brand has three completely different sales channels, and the price of doing so is undoubtedly high.
German Volkswagen's determination to compete for the joint venture distribution rights of FAW-Volkswagen, Shanghai Volkswagen and imported Volkswagen is obvious. 1996 at the negotiating table for the establishment of FAW-Volkswagen Sales Company, Germany clearly stated that FAW Group must return 5%- 15% of the shares of the sales company to FAW-Volkswagen year by year, otherwise Germany will restrict the provision of Jetta replacement models. By March of this year, the equity held by FAW Group was transferred to FAW-Volkswagen, and Germany has since held 40% of the shares of the sales company.
In addition, in 2000, Volkswagen claimed to set up the first Sino-foreign joint venture automobile sales company, Shanghai Volkswagen Automobile Sales Company, with SAIC in a 50/50 way, and held the establishment ceremony and released the news before the official approval of the government.
It is said that this made the State Planning Commission and the Economic and Trade Commission a great headache at that time, and finally had to stipulate that the company could only sell the products of Shanghai Volkswagen, and nothing else was allowed to be sold. However, "the market pressure will let us achieve the goal of merging channels sooner or later." Volkswagen executives have expressed their position.
A noteworthy detail is that although the share ratio of Chinese and foreign investors in the joint venture automobile sales company is not dominant at present, the real power is firmly in the hands of the general manager in charge of sales business stationed by foreign investors, and more foreign employees will join in the middle level of the secondary department, while China often only serves as the "idle post" of the chairman. This phenomenon is particularly obvious in FAW Toyota Sales Co., Ltd. and SAIC Shanghai Volkswagen Co., Ltd.
"German Volkswagen chooses powerful dealers everywhere. At the same time, Volkswagen only invests in establishing regional institutions and operation centers, and does not directly invest in agents. German Volkswagen can achieve global sales of products with less capital investment, thus reducing product costs. " Jia said.
Agents who sell popular brands are usually independent companies. They represent the manufacturers in the destination country with the unified logo authorized by the manufacturers, while the manufacturers regulate the behavior of reasonable traders in two ways: one is to explain the responsibilities and rights of agents and manufacturers with agency agreements; Secondly, specific standards are stipulated, and manufacturers set standards and codes of conduct for various activities of agents.
According to the relevant regulations of our government, the examination and approval system must be implemented in automobile sales. To realize car sales, you must go through the examination of relevant departments before you are qualified to sell cars. If you want to sell imported cars, you must pass the examination of another government department and get the right to import and export. Domestic cars and imported cars are also operated separately, so you have to set up sales companies for them respectively. According to the agreement of China's entry into WTO, foreign automobile companies can only obtain the complete distribution rights and trading rights in China in 2006.
From registering a company to obtaining a sales license, many of these links are beyond the reach of an ordinary person. Nevertheless, the high profits brought by this sales system to automobile sales (especially the sales of imported cars) still make everyone sharpen their heads and want to go in.
In any case, the current channel duplication is obvious. Shanghai Volkswagen and FAW-Volkswagen have established independent specialty stores and maintenance point networks respectively, but Volkswagen products under the same brand are sold in different channels and are incompatible with each other. In addition, at present, imported cars and domestic cars should be operated separately. Therefore, German Volkswagen must set up two or more maintenance networks in China.
The situation of spare parts procurement is generally similar. Due to the different product series, both North and South Volkswagen have established their own independent procurement systems. Similarly, the German Volkswagen still pays double the investment.
Brand internal friction
"One woman marries two husbands" has gradually brought troubles to the German public in expanding the automobile market in China. On the surface, the North and South Volkswagen produce their own brands, and the German Volkswagen can be "full house", but brand infighting is still a lingering pain in the hearts of the public.
Due to the need of expansion, Volkswagen now has many brands: Volkswagen, Audi, Skoda, Bentley, Seat, Lamborghini and so on. Integrating brands has become a problem that the public must consider. Internationally, Volkswagen divides its brand into two parts-Audi and Volkswagen series, and compresses or even eliminates some low-profit models.
However, in China, the problem is not so easy to handle, and the public can't avoid the game between the interests of local governments and the constraints of China.
Perhaps due to fate, the brand expression of German Volkswagen is strikingly similar to its current "W" shape in China. In the middle of the "W" shape is German Volkswagen, followed by two joint ventures in China, namely Shanghai Volkswagen and FAW-Volkswagen. At both ends of the "W" shape are joint venture partners of SAIC and FAW, namely American GM and Japanese Toyota.
Shanghai Automobile Group is a very unique example in China automobile industry. It maintains joint ventures with two international auto giants, holding 50% shares of Shanghai Volkswagen and Shanghai GM respectively. And the market share of these two joint venture car companies in China is far from negligible.
How does SAIC coordinate the relationship between two partners as competitors? According to official information, the story between them is always a mystery. However, the public has begun to express their dissatisfaction. In September 2000, the head of German Volkswagen told the Financial Times that he hoped to turn Shanghai Volkswagen into a wholly-owned company after China joined the WTO. However, this statement was subsequently denied by the top management of Volkswagen (China) Co., Ltd. ..
"When Toyota and GM were flying around the China auto market, the German Volkswagen seemed to be stuck in the quagmire of two China joint venture partners." Jia, chief auto industry analyst of China Automotive Industry Consulting and Development Company, said.
Although when SAIC and FAW didn't marry others, the company's strategic positioning, marketing methods, model selection and other issues often "bumped into" within the North and South Volkswagen, and the German Volkswagen seemed to tolerate it, when Toyota and GM appeared, it began to show a cool breeze in its bones.
In the three periods that Shanghai Volkswagen experienced: Santana era, Santana 2000 era and POLO era, the cooperative relationship between Shanghai Volkswagen and Germany was from close to sparse, and the industry accused the German public of irreconcilable culture with German culture as the main reason.
Analysts pointed out that Volkswagen brands must be unified, otherwise they will not be able to form a joint force and compete with their opponents in all directions. On the surface, the German public is still good at it. At present, as long as three "people" participate in the exhibition together, it must be * * * using one booth. German Volkswagen is now trying to emphasize that there is only one "Volkswagen" everywhere, instead of even encouraging FAW-Volkswagen and Shanghai Volkswagen to be "brothers" as at that time.
The disharmony between face and heart makes it difficult for German Volkswagen to ride freely in China automobile market for the time being.
The shackles are hard to get rid of.
In order to meet the challenge, Volkswagen is trying to improve its business model, and the most striking action is to replace the top management in China.
In April this year, Volkswagen announced that Winfried Fallante, the current vice chairman of the management committee of Skoda Automobile Company, would take over as Wei Zhibo, the director in charge of China business this summer, and Lei Sineng, the president of China, also retired in June this year.
For Vahland, the 48-year-old new president of Volkswagen China, working in China is undoubtedly an unprecedented major challenge in his career. Can he save depressed people in times of crisis?
As the former vice chairman of Skoda Company, Vahland may take it for granted that Skoda cars that will be put into production in Shanghai Volkswagen need to set up a separate network, but it is not easy for him to understand why Volkswagen brand products of the two joint ventures can only be sold in two networks respectively, and why imported Volkswagen brand products need to set up a separate network for sales. I am afraid of this high-cost redundant construction and self-competition problem.
When he left his job, Lei Neng said that the reason why the two joint ventures were allowed to produce all the products of Volkswagen Group was because they each had a network, so that customers could see and choose all the models at one dealer, thus increasing sales opportunities. This is also a fatal mistake that Reese may make in China. He has been looking forward to laying the net first and then putting the two nets together. Time has proved that his efforts have not worked, but have become a burden.
Although Reith can claim that his company has "good cooperation" with two China partners, he tries to make the two joint ventures more coordinated by sharing suppliers and distribution systems. However, due to the lack of willingness of two China partners to cooperate, Les Neng's efforts are being frustrated.
In addition, the public is always ignorant of products and price policies. In addition to the external environment, Volkswagen's current predicament lies in the sharp increase of competitors and the intensification of competition. Its internal cause lies in the fact that Volkswagen's actions on China products and marketing strategies are too slow to keep up with the ever-changing China automobile market. This year, competitors are competing to push new cars. GM launched five models in the first half of the year, while Volkswagen's new Audi A6 is a multi-function vehicle, while the Golf A5, Passat B6 and brand-new Jetta that consumers have been waiting for for many years are long gone.
Volkswagen's market and price strategy is as tough and inflexible as the German character. The new models launched by North and South Volkswagen after Santana and Jetta are not only higher in price than similar models, but also a little higher in the price of accessories in their factories. The most typical ones are POLO and golf, and many people are scared away by its surprisingly high price of accessories.
The key to lifting the shackles depends on the will of the two joint ventures. We understand that in the joint procurement, Volkswagen (China) has set up a special team to provide platforms and related services for the two joint ventures, so as to realize the synergistic effect of parts and raw materials procurement. After all, the scale effect brought by centralized procurement is easily reflected in the books.
In the face of later competitors such as Hyundai Motor, it may not be too late for Volkswagen to take measures such as price reduction. But the key question is how the public can control the north and south cars at the same time to avoid the opposite direction.