Author: Guan Hongye
In the middle of winter in Beijing, gray is the unchanging main color, but there is an exception, located in the fashion landmark Blue Harbor, the Volkswagen City Showroom, with a refreshing digital experience, to create a unique temperament of the Internet celebrity punch card. Choosing to be interviewed by the media here, Dr. Feng Sihan, CEO of Volkswagen Group China, clearly has special considerations.
Dr. Sihan Feng, CEO of Volkswagen Group China
To a certain extent, this is also the refraction of Volkswagen in the past year: Volkswagen has seen the biggest sales decline in nearly a decade under the impact of a variety of unexpected factors; it is in the gray background that Volkswagen's electrification and digital new engine has turned at full speed, becoming a bright light that gradually enlarges under the dawn before dawn.
There are ups and downs, and the highlights are undulating
The epidemic has superimposed on defects and completely disrupted the pattern of the global auto market. According to Auto Forecast Solutions, the cumulative production reduction in the global automotive market will be about 10.2 million units in 2021. Among them, the production reduction in the Chinese market is about 1.98 million units, accounting for about 19% of the cumulative reduction in global automobile production.
For production cuts, Volkswagen has the deepest understanding. In 2021, the Volkswagen Group's global sales decreased by 4.5% y/y to 8.882 million units.
Under the globally integrated supply chain, China is of course alone. Feng Sihan said that in 2021, Volkswagen's deliveries in China fell by 14%, with deliveries of 3.3 million vehicles. But he pointed out that in the first half of the year before the chip crisis broke out, mass sales were still good, and sales and market share maintained a normal trajectory and development channels. However, in the second half of the year, it continued to be affected by the shortage of chip supply.
In the case of Audi, sales in China hit a record high in the first half of the year, but from the second half of the year, they suffered from shortages, and by the fourth quarter of last year, deliveries were 34% less than that of the same period last year.
It is worth noting that under the sliding market, there is still no bright spot. Globally, Volkswagen's sales of electric vehicles have increased significantly. In 2021, the Volkswagen Group's pure electric vehicle sales increased by about doubled year-on-year to 452,900 units, and the share of electric vehicle sales rose from 2.5% last year to 5.1% now. Plug-in hybrid models also performed well, up 61% year-on-year to 309,500 units.
On the other hand, high-end brands still maintain a good growth momentum. In China, Porsche hit a new high with year-end sales of 95,000 units; both Lamborghini and Bentley achieved new sales records, achieving sales of 3,916 and 861 units, with the two brands about 1,500 more than the combined sales in 2020; and Audi delivered a total of 700,100 units, a slight drop of 3.6% compared to the 2020 delivery level.
Even in the most competitive economic car market, in the face of the pressure of China's own brands, the young sub-brand Jetta has achieved good results, with year-end sales reaching 169,000 units, an increase of 14,000 units over the previous year, which also makes jetta the only product brand to achieve positive growth.
As a large family with 12 sub-brand members, there is always a certain difference between brothers and sisters. Feng Sihan said happily: In general, there are ups and downs. The Group's overall sales delivered 3.3 million vehicles, still proving that Volkswagen is the number one automaker in the minds of consumers.
ID. remains the number one target
In the era of great changes in the industry, transformation is always full of uncertainty and even pain. In the past, the core criterion for measuring the success of an automobile company was: cost, price, channel, brand, and industrial chain integration, that is, judgment based on the traditional manufacturing base. In just a few years, new equations are taking shape: big data, Internet of Vehicles, intelligence, ecosystems... Obviously, the business model has become very different.
Volkswagen has long been aware of this. In the automotive industry, Volkswagen was the first car giant to announce an all-out shift to electrification. As early as September 2017, Volkswagen launched its electrification strategy "Roadmap E", with the goal of electrifying the entire model lineup of the Group by 2030.
The problem is that the ship is difficult to turn around, let alone the tens of millions of giants.
Feng Sihan said frankly: For the ID. series of electric vehicles, Volkswagen aims to sell 80,000-100,000 vehicles last year, but due to the global chip shortage and the impact of the epidemic in Ningbo in the last few weeks of December, the final sales volume is more than 70,000.
Although the sales volume of ID. did not meet expectations, the market side has gradually established the reputation and quality label of ID. electric vehicles. In 2021, ID.4 won the "Collision All Excellent" result of China Insurance Research Institute; in the winter test drive organized by FAW-Volkswagen, the ID.series was unanimously recognized by the cold without anxiety, mileage not anxious, and safety without anxiety; last year, there was a flood in Zhengzhou, and the ID. car had no problem wading through the water at a depth of 80 cm, including the battery system under the bottom plate, which was not affected in any way and could work normally... Feng Sihan said that all these achievements show that ID. represents Volkswagen's quality capabilities, it embodies the ease of use of daily life, and upholds the quality and safety that has always been valued.
ID. Not only is the model novel, the sales model is completely different from the traditional dealership form, and a new agency model is adopted, and a city showroom dedicated to ID. models has been established. By the end of last year, ID.'s urban exhibition halls had been completed 115, and it will reach 200 by the end of this year. With the increasing number of ID. agents, there are now 6,000 trained ID. sales specialists selling ID. cars.
Looking ahead to the sales forecast of the ID. in 2022, Feng Sihan did not give specific figures, but it can be inferred that on December 9 last year, Volkswagen's electrification plan accelerated again, planning to invest a total of 159 billion euros in the next five years, of which 89 billion euros will be used for electric mobility and digital-related technologies. Volkswagen expects that by 2026, 1/4 of its cars sold will have pure electric systems.
Feng Sihan expects that by 2030, if the total number of Chinese car markets reaches about 30 million, the market for electrified models will be almost 15-16 million. All indications are that in 2022, ID. will remain Volkswagen's number one target.
Three major projects, parallel advancement
As a vane of industry transformation, Volkswagen of course can not just talk about ID., in the process of turning to intelligent electric vehicles, "Renqi Media" observation believes that Volkswagen has at least three parallel major projects in the high-speed advancement.
First of all, there is the brand new Volkswagen (Anhui) factory. Feng Sihan describes it as the third pole of Volkswagen's future in China. The Anhui factory was built so fast that it even exceeded Tesla's speed in Berlin. Construction began in April 2021, 40,000 trucks of earthmoving were processed in three months, and by this summer, the Volkswagen (Anhui) plant will be ready for production.
Feng Sihan stressed that Volkswagen (Anhui) is not simply the presentation of the production and manufacturing process, but also supports the implementation of the group's electrification strategic intention. "We want to build an ecosystem around Volkswagen's (Anhui) MEB production and manufacturing, which includes both digitalization and software development, such as the branch of the group's CARID software company, as well as support and support for batteries, spare parts, electronics, electrical and other aspects."
In the past model, including product introduction and technology updates, most of them were promoted by the group headquarters, and in the digital era, Volkswagen has firmly established a new proposition from China to the world. "Volkswagen (Anhui) is not only a high-tech integrated manufacturing center, but also an innovation and creation center around NEV, better realizing the idea of 'in China for China'."
The second is to strengthen the ecosystem layout of electric vehicles. Hefei-based Guoxuan Hi-Tech will be an important part, next to volkswagen (Anhui) MEB factory is the production line of battery systems. In addition, Volkswagen has also reached strategic cooperation with CATL and A123 to form a sustainable ecological layout.
Third, fully promote the landing of CARIAD software companies in China. "RENFA Media" learned that the layout of CARIAD China has been basically established: first, the headquarters is located in Beijing; second, Anhui will also have a CARIAD team, mainly around the standard software and electronic architecture to do on-board applications; third, in Shanghai, will also establish a team focusing on automatic driving; fourth, there is a pure software department in Chengdu, mainly to do coding programming. Multiple office locations, undertaking different hardware and software work.
In the future, an important part of Volkswagen's innovation roadmap is centered around CARIAD and cariad's work departments in China, including functions and capabilities to support future advanced intelligent interconnection, advanced intelligent driver assistance systems, and a new generation of electronic architecture with the SSP platform.
It is clear that Volkswagen is undergoing fundamental change in the era of great change, as Volkswagen Group CEO Dies said: "Volkswagen Group will gradually change from an automaker with multiple brands that sells cars to consumers through dealers to a vertically integrated automotive technology group." ”
In this process, software, autonomous driving and other fields have been elevated to a more important position. Volkswagen's future has a greater tilt for technology investment, and from the perspective of development path and vision, the future of Volkswagen will be completely different from the current Volkswagen.
It has also become more open-minded and pragmatic about the Chinese market. Feng Sihan revealed that when Volkswagen is doing new energy vehicle development, 80% of the benchmark models are Chinese local models, and only 20% are benchmarking international models. This would have been unimaginable a decade ago, but that's what has already happened.
Under the tide of the turbulent times, Volkswagen, a big ship, is rapidly adjusting its course.