With the development of China's automobile international policy all the way, to keep up with the upgrading of Chinese automobile consumption fashion, to release automobile models that meet the value concept and brand demand of China's mainstream consumers, Volkswagen, as a representative of the Germany automobile, has persisted in investing and cultivating the fertile soil of China's automobile industry for more than 40 years, and has already cultivated a good brand influence and a deep-rooted customer support group in the Chinese automobile market.

    With its powerful and convenient auto parts service network and in-place marketing and financial support, it has gained a broad market prospect that the brand value needed for the upgrading of the auto market in China in recent years. The strength of the Volkswagen Group's global oligopoly brand in auto industry has been highlighted in front of consumers.

    For example, Volkswagen has two of three major high-end brands that lead the global automotive industry, Bentley and Porsche. It also owns the world's high-end auto brands such as Audi and Lamborghini that are loved and familiar to people in China. Volkswagen, with its proud global auto industry strength, winning the favor of mainstream consumer groups in China.

    On the ranking of 2021 "Daguan · Keweiwei World Brand Value Top 900", Volkswagen Group ranked ninth with its brand value of 1,011.705 billion RMB. None of the top eight are in the auto industry.

    A news from Volkswagen's official website on August 30, 2021 stated that, Porsche sees further growth opportunities in Asia and expands its engineering and assembly capabilities with an unpredictable trend. Starting next year, its production capacity will increase further. Porsche's global sales profit in the first half of the year increased by more than 100% year-on-year, operating income reached 16.53 billion euros, and achieved a return on sales of 16.9%.

    The sports car manufacturer Porsche has met the needs of Asia. Its development work has a long tradition of using foreign development websites to look for the perfect services for the future sports car. Starting next year, its production capacity will increase further, including a new permanent R&D satellite in China that will continue to focus on Porsche's largest single market.

    Oliver Blume, Chairman of the Executive Board of Porsche, said that, “Curiosity drives us to continuously learn and fine-tune our cars.” In order to meet the needs of customers around the world, Porsche has established a dedicated, evolving and permanent R&D base network all over the world. It performs important engineering and design work and the lessons learned from it will put into the finished car.

Porsche operates a permanent network of research, development and testing locations on multiple continents, all of which are directly connected to the company's engineering headquarters in Weissach, Germany. These areas include Lake Arjeplog in northern Sweden, where most of the extreme cold weather tests were conducted, the unique climate and roads of Johannesburg, South Africa, and the dry and hot weather in California, USA. This work not only affects power and vehicle quality, but at the same time, comfortable and convenient functions and technologies are also applicable to current and future Porsche.

Another example of long-term global investment is Porsche Digital, which was established in 2016 and is a subsidiary of Porsche. The company focuses on research and development of new customer-centric digital services, headquartered in Germany, with important offices in the United States, Spain, China, Israel and Croatia.

    "We are proud of being a dynamic global company and have invested in localization projects to ensure that our cars and services reflect the specific needs of markets outside of Europe,” said Porsche R&D Executive Board Member Michael Steiner. "To be the best, we need a long-term presence. The increase in the location of China's R&D satellites has joined existing R&D operations in Europe, North America and other regions, highlighting our commitment to ensure that our cars remain relevant and coordinated with our markets. Seize further growth opportunities in the ASEAN region ".

        When it comes to Made in Germany, it has to be admitted that the Germans who work rigorously and pay great attention to rules and disciplines have left a good brand reputation to the people of the world. Generally speaking, the Germans will consciously abide by all the express regulations; the Germans will never touch them if they are expressly prohibited. Pay attention to cleanliness and tidiness, not only pay attention to keeping the small environment of one's life clean and tidy, but also attach great importance to the cleanliness and tidiness of the large environment.

        The Volkswagen brand Jetta has taken the lead in applying the world's most advanced engine in China, and with its unique product design performance and comprehensive safety technology and equipment, it has formed the distinctive product personality of the Jetta series. With its reliable, durable and excellent product quality, Jetta sedan has set the records of "500,000 kilometers without major repairs" and "900,000 kilometers without major repairs" in China, and has won the reputation of quality. After 15 years of sales, it still won the 2006 annual sales champion of the same class.

      The auto world, which has never been overlooked by modern people, is different from other high-value products in that it is a necessary factor for automobile renewal. Bringing its absolute value status in the national economy may exceed ordinary people's imagination.

       With the continuous development and growth of the world auto industry, the position of the auto industry in the world economic development has become more and more prominent. It has gradually become the pillar industry of the major automobile production countries, and has a huge impact on the development of the world economy and social progress.

        1. Unparalleled optimization of the universality and flexibility of the traffic structure.

    The modern transportation structure is composed of trains, automobiles, airplanes, ships and other types of vehicles, each of which plays an important role in the structure. Among them, the universality and flexibility of automobiles are unmatched by other modern vehicles. In the United States, Germany, France, the United Kingdom and other countries, automobile transportation turnover has accounted for about 90% of total passenger turnover in recent years. From 1952 to 1999, the proportion of our country's automobile transportation turnover in passenger turnover increased from 9.14% to 54.8%.

        2. The industry that can create huge output value.

        3.The industry with a wide range of impact and large benefits.

        It affects a wide range of the raw material industry, equipment manufacturing industry, ancillary product industry, highway construction industry, energy industry, sales industry, service industry, transportation industry and etc. According to the analysis of the research data from the United Nations Industrial Development Agency, the benefit ratio of the upstream industry to the auto industry and the downstream industry is about 7:1:10.

        4. The broad employment opportunities provided by the auto industry are not only large in number, but also high in technology.

        5. Automobile is the crystallization of high and new technology. The scope and quantity of new technologies involved in the industry are unmatched by other industries. And it has always been the main representative of technology-intensive industries.

        6. Strong export industry.

        7. The industry that contributes huge taxes.

   8. The advancement of socially progressive industries has improved the quality of lives.

      Throughout the history, the rise of the American economy in the 1920s, the economic take-off of the Federal Republic of Germany, Italy, and France in the 1950s, and the development of the Japanese economy in the 1960s were all led by the rapid growth of the auto industry. Automobiles have long become a pillar industry in some countries.

  Looking forward to the join hands of the global automotive multinationals with China's automotive industry.

     In 1984, the world auto industry ushered in a once-in-a-lifetime opportunity for the development of China's automobile market demand. "China Automobile Industry Yearbook" introduces that China’s auto industry is inextricably linked with multinational companies from its birth to its development and growth. World-class multinational auto giants have a decisive influence on China's auto industry.

    Through a large number of technology introduction and joint venture cooperation, China's automobile international technology has gathered experience in the past 40 years and achieved rapid development. The output of sedans has increased year by year, and some of these products have basically been launched at the same time as foreign markets, which has shortened the gap with the international automobile industry. It also brings unprecedented value feedback and opportunities for brand experience and innovation for global auto giants to invest in the Chinese market.

The development history of China's automobile industry can be clearly divided into two stages: before the entry of multinational companies (1949-1984) and after the entry of multinational companies in 1984. According to "China Automobile Industry Yearbook", the development history of China’s automobile industry is in fact a history of cooperation with multinational companies.

      The sedan industry is the most concentrated field of foreign capital utilization in China's auto industry. Investment and cooperation between China and the international auto industry can be divided into three investment stages.·

        1.  Working hard with good insight，bravery, experience and judgment, foreign-funded enterprises were careful in exploring.

        Before the "Auto Industry Policy" was issued, our country's auto industry was in its infancy. In order to change the serious situation of the auto industry's “lack of both weight and light vehicle, and almost blank in sedans”, our country began to encourage the import of foreign advanced technology, equipment and funds in various ways to our country's automobile industry, especially the whole car manufacturing industry. Therefore, at this stage, many multinational companies have entered China to engage in the production of sedan.

        2.  Know the policy, understand the market demand, and then shoot the arrow at the target:

      In 1994, the state promulgated the "Industrial Policy for the Automobile Industry", taking into account that the auto parts industry at that time lacked capital investment and technology, which seriously hindered the development of the entire auto industry. Therefore, taking auto parts as the focus of future development has formulated a more lenient investment policy than complete vehicles, and stipulated restrictions on the approval of new vehicle joint venture projects for cars and light vehicles. Due to policy restrictions, the investment scale of multinational companies entering this stage is relatively large, and multinational auto parts production groups have also begun to enter our country's parts industry in batches.

    3. Great development. International policies are good for upgrading. Opportunities are more in the familiar and well-founded Chinese market, and international investment in automobile giants that have already obtained feedback through early investment.

        After China's accession to the WTO, international open policy agreements have caused a new wave of investment by multinational companies. The number of joint ventures between multinational companies and local Chinese auto companies has almost exceeded the sum of the past 20 years. This investment wave has greatly surpassed the previous two stages in terms of cooperation level and investment scale, and has greatly promoted the pace of restructuring of our country's automobile industry. Moreover, there are corresponding breakthroughs in the three bottom lines for the direct utilization of foreign investment in the "Automotive Industry Policy": localization rate, foreign-owned vehicle companies must not exceed two, and Chinese parties have a controlling interest. These have all made corresponding breakthroughs and promote the development of the country's new automotive industry policy.

        With the forward-looking vision and the courage and strength of the international auto industry giants, Volkswagen took the lead in establishing the first joint venture Shanghai Volkswagen in China in 1984 and the second joint venture in Changchun, FAW-Volkswagen in 1991. In addition to the car production across the country, there are also auto parts supply and customer service companies. The earliest contact with the Chinese government began in 1978, when China implemented economic reforms and opening up, and introduced foreign capital and advanced science and technology. Speeding up China's modernization process and improving international competitiveness, whether it was then or now, is undoubtedly the key to achieving this goal. Since Volkswagen entered the Chinese market, it has maintained its leading position in the Chinese car market. In 2005, a total of 572,000 Volkswagen and Audi sedans were produced in China. At the same time, it also sold Skoda, Bentley and Lamborghini and other Volkswagen Group brand imported sedans.

        The Volkswagen brand has always been actively providing customers with cutting-edge scientific and technological achievements, unique designs and the best quality products in almost all automotive market segments. Its car products include not only medium and small cars such as Golf, Passat, Lupo and Polo, but also top luxury cars such as the Phaeton and Touareg. The German-Chinese joint venture company, FAW-Volkswagen, sells following brands in China: Bora, Golf, Jetta, Magotan, Sagitar, CC. For Shanghai Volkswagen, there are: POLO, Langjing, Langxing, Langyi, Passat, Santana, Santana Zhijun, Tiguan, Touran. Volkswagen has always been attracting the favor of Chinese drivers with its excellent brand influence.

       As early as 2005, Volkswagen had approximately 1,000 dealer-ship and maintenance service partners. Therefore, the sales network in China is the densest and most directly providing customers with various services. The Volkswagen China powertrain strategy from 2007 is the cornerstone for Volkswagen to deploy new technologies in China.

        The high standards of service quality followed by Volkswagen in China are the same as the global Volkswagen service standards. Therefore, Volkswagen not only holds a leading position in the European after-sales service market, but also continues to play a leading role in China. China has become the most important strategic market for Volkswagen in the world. Volkswagen Group currently owns 10 famous car brands: Volkswagen (Germany), Audi (Germany), Lamborghini (Italy), Bentley (UK), Bugatti (France), SEAT (Spain), Skoda (Czech), Volkswagen Commercial vehicles (Germany), Porsche (Germany) Scania (Sweden). Volkswagen not only leads the car sales in China, but also makes the market foundation it lays popular in the Chinese car market.

        The strong auto sales force has awakened the world's position in the Chinese auto market. China is expected to grow at a rate of 50% in the next two years, which is enough to impress the world.

       The gradual upgrade of China's life standards , with the doubling of the asset value driven by real estate in the past 10 years, the car production capacity and value investment depression have appeared. Driven by the rapid appreciation of China's real estate economy, the amazingly high-value automobiles have clearly been accepted by the Chinese market.

        Global automobile production is mainly concentrated in Euro-pe, North America and the Asia-Pacific region. The automobile production of the top 15 countries accounts for about 92% of the world's total production, which basically monopolizes the world's automobile production. From the data charts of recent years, it is found that developed countries are affected by the weakness of the domestic automobile consumer market, the growth rate is slow, and some even experienced a sharp decline. For example, due to the impact of the economic downturn in the United States, North America has the largest decline, reaching 10.4%. Although Europe has slightly increased, the situation of different countries are quite different. Among the six major automobile producing countries, France, Belgium and Germany have increased by 8%, 15% and 3% respectively;   While the UK, Italy and Spain have decreased by 7%, 9% and 6%  respectively.  Britain was squeezed out of the top 10 for the first time. However, in recent years, emerging countries in the Asia-Pacific region have enjoyed a strong momentum of development driven by the fast-growing automotive consumer market. South Korea has squeezed into the top 5 last year, and China is expected to grow at a rate of 50% in the next two years, which is enough to impress the world.

        According to data from "Auto Industry Planning Reference": The popularization of cars can be divided into three stages: When the per capita GDP is below 1,000 US dollars, the car market has just started, and the mini-cars (<1.0) and popular cars (1.0-1.5) are in dominant position. When the per capita GDP exceeds 1,000 US dollars, the development of cars enters the introduction stage, and the output of various models is increasing. The proportions are basically normal distribution with popular cars as the center line;  When the per capita GDP exceeds 3,000 US dollars , cars have entered the popularization period, and car consumption has also begun to shift from new demand to renewal demand. The grades of cars will be significantly improved, basically with popular and mid-range cars. The sales of high-end cars will only be after the per capita GDP exceeds 30,000 US dollars. It has begun to increase significantly. From the perspective of demand for high-end cars, China’s consumption of “official cars” has been at a relatively high level due to the large proportion of consumption. Although the proportion will decrease year by year with the popularity of cars, the absolute number of them is still quite impressive. Especially in big cities like Beijing, Shanghai, and Guangzhou, the popularity of cars will be faster. It is expected that in two or three years, the status of China's car market will rise rapidly, and it will probably rank 6th or 7th in the international car market. Therefore, China is not only the world's largest potential auto market, but also a very attractive and very large current market in the world.  

        From the perspective of the market share of different grades of cars, in the process of popularization of cars, it will inevitably go through an evolution process from low to high. According to the practical experience of developed countries in the automobile industry, if measured by GDP per capita, in different periods, different leading products will be adapted to it. Calculated on the basis of China's 1.4 billion population, due to the liberalization of the family planning policy, rigid demand for automobiles of various grades is strong, and various models will have a considerable number of consumer groups in China in the future.

        German Volkswagen creates the ideal world of future auto-mobiles and promotes the golden age of the mobility of the public and humans.

        Volkswagen Vision 2050: A neutral world, neutral energy supply, complete communication infrastructure and universal availability of autonomous driving.

        Generally speaking, since the 1990s, the world automobile industry has entered a mature market stage dominated by renewal needs. According to the 2021 Baidu Wenku, automobile industry development status and future development analysis, the global passenger car annual revenue exceeds one trillion US dollars. The total global passenger car sales in 2018 was 57 million, with sales of 1.3 trillion U.S. dollars, and the market size is expected to reach 1.5 trillion U.S. dollars in 2022. In 2018, the Chinese passenger car market size was about 510 billion US dollars, and the sales volume was approximately 24 million vehicles. It is estimated that by 2022, China's passenger car market will grow steadily to 630 billion US dollars and its sales volume will reach 29 million.

           Secondly, the proportion of automotive electronic compoents continues to increase, with the market size reaching hundreds of billions of dollars. The global automotive components market has remained relatively stable in recent years.

       Not only globally, the Internet of Vehicles + autonomous driving will also become a new driving force for the development of the automotive industry in China. The number of users in 2021 will increase from 11.64 million to 40.97 million, and the penetration rate will increase to 21.1%. Among them, the market size of the autonomous driving field will be continuously maintaining a high growth rate of more than 10%, the drive of autonomous driving and vehicle networks will drive the development of the smart car industry. Smart driving and the internet of vehicles are a big market.

作者：Song Jinhong