Market share Breakdown of chinese auto Industry Others (i.e. local Volkswagen brands) 21% 32% 10%GM 9% Ford33o102o/o 3%/o/4%0 BYD Hyundai 6% Great 6% Wall PSA Nissan Honda Toyota Taken from the vw Group China, Mar 2013
Market Share Breakdown of Chinese Auto Industry Taken from the VW Group China, Mar 2013 http://www.economist.com/node/21558269
Analysis of the Chinese Car Market The reason for this obvious preference for imported automobiles in Chinese car market is based on the perceived and real inferiority of Chinese automobile ranas These local automobile manufacturers have suffered in the domestic market due to a widespread perception that foreign brands are of better quali This proved to be a well-deserved perception, since the crash tests conducted by the german auto association showed that many Chinese cars scored 1 of 5 possible stars, suggesting that a driver stand little chance of surviving a traffic collision http://wwwibtimes.com/gm-ford-vw-dominate-chinas-auto-industRy-wHy-cant-chinese-companies-saic-dongfeng-geely gac-make
Analysis of the Chinese Car Market • The reason for this obvious preference for imported automobiles in Chinese car market is based on the perceived and real inferiority of Chinese automobile brands • These local automobile manufacturers have suffered in the domestic market due to a widespread perception that foreign brands are of better quality • This proved to be a well-deserved perception, since the crash tests conducted by the German auto association showed that many Chinese cars scored 1 of 5 possible stars, suggesting that a driver stand little chance of surviving a traffic collision. http://www.ibtimes.com/gm-ford-vw-dominate-chinas-auto-industry-why-cant-chinese-companies-saic-dongfeng-geelygac-make
Analysis of the Chinese Car Market Similarly, with increasing environmental concerns following Chinas market liberalization, the perception that local manufacturers produce inefficient vehicles push local consumers toward foreign brands. Chinese government has implemented a number of tax adjustments encouraging the sale and promotion series of actions made to foster a broad vehicles, a of hybrid electric vehicles, pure electric environmental friendly strategy within the auto industry However China's weak r&D domestic innovation and design capabilities remain key challenges to its international competitiveness http://www.economist.com/node/21558269
Analysis of the Chinese Car Market • Similarly, with increasing environmental concerns following China’s market liberalization, the perception that local manufacturers produce inefficient vehicles push local consumers toward foreign brands. • Chinese government has implemented a number of tax adjustments encouraging the sale and promotion of hybrid electric vehicles, pure electric vehicles, a series of actions made to foster a broad, environmental friendly strategy within the auto industry. • However, China’s weak R&D, domestic innovation and design capabilities remain key challenges to its international competitiveness. http://www.economist.com/node/21558269
Volkswagens Business Model Distribution oriented multinational company Production-oriented multinational company VWs Competitive Advantage 1. Leveraging on pre-existing and domestic resources assets and competencies Transferable knowledge creation and innovation http:/lannualreport2012volkswagenagcom/managementreport/value
Volkswagen’s Business Model • Distribution oriented multinational company • Production-oriented multinational company • VW’s Competitive Advantage 1. Leveraging on pre-existing and domestic resources, assets and competencies 2. Transferable knowledge creation and innovation http://annualreport2012.volkswagenag.com/managementreport/valueenhancingfactors/marketfocus.html
Volkswagens Business Model (Distribution) Distribution channels 1. Production facilities Automobile import and distribution Center Dealerships 4. Consumers
Volkswagen’s Business Model (Distribution) Distribution Channels 1. Production Facilities 2. Automobile import and distribution Center 3. Dealerships 4. Consumers