Volkswagen determined to defend its position as market leader in China

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VW determined to defend its position as market leader in China

On April 11 1983 in Shanghai, Volkswagen and its local partner assembled their first car in China, a boxy sedan called Santana. The model proved wildly popular, becoming a symbol of China’s rising middle class and cementing VW’s role as the country’s most prominent carmaker.

“A large part of our bonus is created in China,” Diess said in a speech to staff in Wolfsburg, Germany. “We are doing everything to defend our position there as market leader.” The top domestic rival looks to be BYD, the Shenzen-based manufacturer backed by Warren Buffett’s Berkshire Hathaway. It’s on the cusp of entering the trillion-yuan market cap club after handling lockdowns, chip shortages and price increases better than many of its peers.

“Who of you here would spend €200 on a karaoke function?” Diess asked his workers on Tuesday. “For many Chinese, it’s standard — so we must deliver on that.” VW faces mounting pressure to address allegations that ethnic Uyghurs are suffering from coercive labour practices in the region. Two board members have recently voiced concerns. VW’s local partner in charge of its Xinjiang factory, SAIC, has said no workers are mistreated. Diess’s view is that VW’s presence in the region can be a force for good.

 

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