VW’s Foshan plant construction under way
For Volkswagen, their new factory in Foshan is a major project, so important that the head of VW Germany came to Beijing himself to talk about VW’s plans for their first factory in Southern China. The Foshan factory will be VW’s major entry in the lucrative Guangdong market where the majority of car buyers are buying from Nissan, Toyota and Honda due to their local presence, VW has lost out in the market due to the long delivery times for its cars coming from Shanghai or North East China.
The new factory will be majority owned by VW’s Chinese partner, First Automobile Works in a 49:51 deal, originally the deal was for FAW to take a 60% stake and a myriad of VW groups were to each take a small share (VW China 10%， Germany VW, 20%, Audi 10%), the 49:51 deal has already been submitted to the government and is expected to obtain official approval in the next few weeks.
Between January 2010 and October 2010 VAG group sold 320,000 cars in Southern China, an increase of 56% over the previous year and grabbed 15.2% of the market share. Skoda alone sold 152,000 cars in the Southern provinces, an increase of 52.4% and Audi sold 52.3% more cars down south in the same period as well.
Cars for the Foshan plant have already been confirmed, the recently announced Kai Li brand, the 7th generation Gold and also the Audi Q3 have been confirmed for manufacturing in the new factory.
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At first Peugeot tried mining gold in the deep south along with Isuzu. Both gave up, unsatisfied with a return of small nuggets early on. However Honda, and later Toyota, saw a future in the deep south and patiently dug deeper. It didn’t take long for others to follow, realizing that in time the main vein once uncovered would go on producing a rich treasure. And so came Nissan, FAW, Hyundai, Hino, Fiat, Mitsubishi, Wanxiang.
What does ‘VAG’ stand for these days? Does it still refer to the ‘Volkswagen Audi Group’, the old term for the sales organization? Read it yesterday in another article as well and was wondering….
Personally I think that VW-FAW have left the entry into the South a little too late. As Dragin commented Honda and Toyota and deeply entrenched and Nissan has been digging deeper than the rest over the last few years so unless VW-FAW are going to start targeting the Hyundai-Kia taxi fleets they could be in for an uphill battle.
10 years ago every second car on the streets in GD was a VW Jetta or Santana but those days have long gone.
Right!!!!! Jetta is phasing out of the taxi fleet-market in the South. We seldom find them around GD cities. Now the hot cakes are Hyundai Sonata, VW Santana(MK???), Toyota Corolla…
VW has a hard time to get a bigger market share in here. VW needs a big car like Teana, Accord & Camry but in a competitive pricing liked the Japanese…….