Volkswagen has been active in China for over 30 years. In 2008, the Group sold more than one million vehicles there for the first time. This means that China is and will remain both a core market and a growth market for the Volkswagen Group. Environmental protection is a key challenge for China’s fast-growing economy. And it is a challenge the country’s biggest carmaker has taken up with great determination.
A sea of uniformed workers riding their bicycles to work, with the red flags of Communist China and Mao’s portrait in the background. This was the picture that sprang to mind for decades whenever Westerners thought of China. However, thirty years of change and economic reform have left their mark on the world’s most populous country. And nothing symbolizes the nation’s new prosperity more strongly than owning a car. The role that automobiles play in China’s definition of its progress can hardly be exaggerated.
ENORMOUS MOBILITY BACKLOG
China will remain one of the fastest-growing automobile markets in the long term.
The number of vehicles on the streets of the People’s Republic is growing rapidly by an average of six percent per year. Further support for this trend comes from the fact that the government has declared individual mobility to be the benchmark for growth and prosperity. The automotive industry is considered a key sector for the enormous growth of the Chinese economy, and Volkswagen plays a major part in this: in 2008, the Group had a market share of approximately 19 percent in China and Hong Kong. Volkswagen, Audi and Škoda brand vehicles are particularly popular in China, although the premium Bentley and Lamborghini brands are also finding buyers in the growing luxury segment. Ever since it entered the market, Volkswagen has worked closely together with local joint venture partners at all levels of production. Some of the models that are now rolling off the production lines in China, such as the Volkswagen Jetta or the Golf, are almost identical to their Western cousins. Others, such as the Lavida or the New Bora, have been specially developed for China. The Chinese car market is now extremely competitive: all international top-tier manufacturers have set up joint ventures, with around 80 brands being present overall. Nevertheless, China is still a significant driver for the Volkswagen Group’s total sales. In full-year 2008, VGC and its partners sold 1.02 million vehicles in the country, an increase of 12.5 percent. This meant that Volkswagen Group China topped the one million mark for the first time in its history.
Despite these dizzying figures, though, the Group has kept a cool head. The company takes its corporate social responsibility seriously and is a pioneer when it comes to striking a viable long-term balance between economic and ecological aspects. The dramatic expansion of the Chinese economy and the increase in mobility have come at a price. The government itself puts the cost of environmental pollution at USD 200 billion a year. While the continued use of coal as a source of energy is certainly one of the main causes of environmental pollution, the rapid increase in the number of cars on the road is another contributing factor. This is one reason why, in the run-up to the Olympic Games in August, the government banned 1.3 million out of the total of 3 million cars from the streets of Beijing for the duration of the event.
All Volkswagen Group production locations are certified to ISO 14001, the international environmental management standard.
MANY ENVIRONMENTAL ACTIVITIES IN CHINA
UNIFORM ENVIRONMENTAL STANDARDS
The Volkswagen Group operates production facilities in seven different cities.