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Elham AbolFateh

Automobile

VW، BMW، FCA، others make changes to protect profits in China

Monday 01/April/2019 - 09:48 AM
US-China- European
US-China- European Union flags (File Photo)
Auto news
About 30 years ago former Volkswagen CEO Carl Hahn sought a cost-effective solution to build cars in China with First Automobile Works، Auto news reported.

Eager to continue with his pioneering push into the country، it occurred to him that VW's failed U.S. plant might provide the answer. The Pennsylvania factory had closed in 1988 and all the tools needed to build the Jetta were collecting dust.

By moving the entire production machinery to a new plant that would be jointly operated with FAW in Changchun، Hahn had a solution to both of his problems. Risks would be minimal since everything he needed had already been written off.

With help from the affordable sedan، VW mobilized a generation by putting millions of rising middle-class Chinese behind the wheel of a new car. This helped to establish VW، together with FAW and its other local joint venture، Shanghai-VW، as the dominant automotive force in what is now the world's largest vehicle market.

Nearly three decades later، VW Group CEO Herbert Diess's decision to take responsibility for the market after the retirement of his China chief، Jochem Heizmann، highlighted the importance of the country.

"Today our Chinese operations are the most successful worldwide with benchmark productivity and quality، the best product launches worldwide -- and they are our most profitable operations،" he told VW's local staff in January.

Edited by Hassanain Tayea.

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