Dr. Winfried Vahland, former president of Volkswagen Group China, said that from now until 2020. The new car price in the Chinese market may drop by 20% on the current basis.
The fierce competition, low disposable income and relatively low production costs will be important factors leading to the continued decline in car prices in the Chinese market. Dr. Van Ander said at the Automobilwoche industry conference in Berlin on November 2nd.
In the current Chinese market, Western car manufacturers have mostly set new car prices higher than their domestic counterparts. However, because of the higher quality of imported and joint venture vehicles, this high pricing can be accepted by the market for the time being. However, Chinese brands are catching up quickly, and it is foreseeable that Chinese private brands will continue to sell their cars at a low price. This will bring continuous price pressure to Western automakers.
Dr. Van Andre explained that the cheapest cars in China are currently priced at around 3,000 Euros each and the average price is close to 10,000 Euros, compared with the average price of 16,000 Euro per car in Europe.
Dr. Van Ander became president of the Volkswagen Skoda brand on September 1st of this year. In the previous five years, he has been the head of Volkswagen's China business. Industry watchers believe that the board of directors of Volkswagen expressed satisfaction with Dr. Van Anderson’s reversal of losses of the Chinese public and significantly increased his market share in the Chinese market. The appointment of the Skoda brand means that the 53-year-old German is internally regarded as a potential successor to the incumbent VW president Martin Winterkorn.
Aiming at China At the Automobilwoche meeting, Dr. Van Ander outlined five key challenges that are crucial to Western companies intending to participate in the Chinese market. In addition to providing targeted products for specific market segments, companies also need to establish and cultivate strong brands. Of course, in China, a dense network of dealers is also essential. In addition, he also emphasized localization and cooperation with business partners, institutions and suppliers.
Despite facing increasingly fierce competition, Dr. Van Ander believes that Volkswagen Brands and Skoda itself are well positioned in China. Skoda currently has 250 distributors in China, and its goal is to increase the number of dealerships to more than 600. Skoda’s plan is to boost sales of new vehicles to at least 1.5 million by 2020, driven by growth in the Chinese, Indian and Russian markets. And its share of sales outside Europe will increase from the current 30 percent to half of the Skoda brand's total sales.
In 2009, Skoda sold 684,226 vehicles worldwide, an increase of 1.4%. This year, this figure is expected to reach 750,000. In China alone, sales of the Skoda brand increased by 60% in the first nine months to 140,402 units.
Dr. Van Andre also said that Skoda will strengthen its position as an entry-level brand for the Volkswagen Group and continue to provide consumers with ample space, functionality, and value for money. “The success of Skoda in China in the past four years has demonstrated the brand potential of Volkswagen and Skoda,†he said.
The fierce competition, low disposable income and relatively low production costs will be important factors leading to the continued decline in car prices in the Chinese market. Dr. Van Ander said at the Automobilwoche industry conference in Berlin on November 2nd.
In the current Chinese market, Western car manufacturers have mostly set new car prices higher than their domestic counterparts. However, because of the higher quality of imported and joint venture vehicles, this high pricing can be accepted by the market for the time being. However, Chinese brands are catching up quickly, and it is foreseeable that Chinese private brands will continue to sell their cars at a low price. This will bring continuous price pressure to Western automakers.
Dr. Van Andre explained that the cheapest cars in China are currently priced at around 3,000 Euros each and the average price is close to 10,000 Euros, compared with the average price of 16,000 Euro per car in Europe.
Dr. Van Ander became president of the Volkswagen Skoda brand on September 1st of this year. In the previous five years, he has been the head of Volkswagen's China business. Industry watchers believe that the board of directors of Volkswagen expressed satisfaction with Dr. Van Anderson’s reversal of losses of the Chinese public and significantly increased his market share in the Chinese market. The appointment of the Skoda brand means that the 53-year-old German is internally regarded as a potential successor to the incumbent VW president Martin Winterkorn.
Aiming at China At the Automobilwoche meeting, Dr. Van Ander outlined five key challenges that are crucial to Western companies intending to participate in the Chinese market. In addition to providing targeted products for specific market segments, companies also need to establish and cultivate strong brands. Of course, in China, a dense network of dealers is also essential. In addition, he also emphasized localization and cooperation with business partners, institutions and suppliers.
Despite facing increasingly fierce competition, Dr. Van Ander believes that Volkswagen Brands and Skoda itself are well positioned in China. Skoda currently has 250 distributors in China, and its goal is to increase the number of dealerships to more than 600. Skoda’s plan is to boost sales of new vehicles to at least 1.5 million by 2020, driven by growth in the Chinese, Indian and Russian markets. And its share of sales outside Europe will increase from the current 30 percent to half of the Skoda brand's total sales.
In 2009, Skoda sold 684,226 vehicles worldwide, an increase of 1.4%. This year, this figure is expected to reach 750,000. In China alone, sales of the Skoda brand increased by 60% in the first nine months to 140,402 units.
Dr. Van Andre also said that Skoda will strengthen its position as an entry-level brand for the Volkswagen Group and continue to provide consumers with ample space, functionality, and value for money. “The success of Skoda in China in the past four years has demonstrated the brand potential of Volkswagen and Skoda,†he said.
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