Sanghai Volkswagen

Topics: Volkswagen, Automotive industry, People's Republic of China Pages: 3 (733 words) Published: May 24, 2013
Question No 1:
Why was Volkswagen so successful in China while other companies failed? Answer:
Shanghai Volkswagen is a joint venture between the German Volkswagen AG and a consortium of Chinese partners. The 25 year agreement signed by the partners in the middle of 1980s provided for 50% Volkswagen AG equity in the venture. By 2001, this co-operation was the most successful automobile venture in China. There are some special reasons why Volkswagen AG an Automobile company, so successful in China comparing other companies. Volkswagen was able to build up their market by taking some effective policies. By 2001, it had achieved a market share of over 50% as a result of introducing hot models and assuring reliable service. By developing supplier quantity component and training the Work Force efficiently was another big reason of their success. Attempts by the U.S. AMC Jeep Corporation and other car makers failed. While other companies were attracted by the potential swift, huge returns because of the large Chinese population of 1.2 billion people (certainly only a very small percentage would be customers), Volkswagen built the venture gradually over the years by sharing their technology with the Chinese. The most important fact is their low rate prices of cars. They were able to keep their product’s price lower comparing other automobile companies. This idea of lowering the rates of products and services took their company on step ahead towards success and glory. They also maintained a good relation with the host countries Govt. which helped them to promote their company over the country. Building good relationship with both supplier and with the community they became very much trustworthy among the companies. So, these were the key policies of Volkswagen AG’s success story. By 2001, this co-operation was the most successful automobile venture in China while other companies failed to maintain these policies.
Question No 2 :
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