volkswagen group china · 2020-06-20 · introduction of volkswagen group china (vgc) volkswagen...

Volkswagen Group ChinaDr. Jörg Mull, Executive Vice President, Finance

HSBC Roadshow, HongkongDecember 09th, 2013

Our Momentum in China

Outlook Market Development

Investments Volkswagen Group China

Driven by Design and Technology

Financial results, challenges and opportunities

2

Content

Introduction of Volkswagen Group China (VGC)

Volkswagen production facilities in China History

1985: Founding of Shanghai Volkswagen Automotive Co. (SVW) as joint venture with Shanghai Automotive Industrial Corporation (SAIC). 10 million vehicles produced as of November 2013.

1991: Founding of FAW-Volkswagen Automotive Co. Ltd. (FAW-VW) as second joint venture with First Automotive Work (FAW). 8 million vehicles produced as of October 2013.

2004: Founding of Volkswagen Group China for coordination and management of activities of Volkswagen Group within China.

Total investments 1985-2013Planned Investments 2014-2018Employees 2012

€ 18.5 Billion€ 18.2 Billion

74,500

Volkswagen Transmission

Shanghai VolkswagenPowertrain

FAW-Volkswagen(Volkswagen, Audi)

Volkswagen FAW Engine

Volkswagen FAW Platform

Shanghai VolkswagenShanghai Volkswagen(Volkswagen, ŠKODA)

Volkswagen AutomaticTransmission Dalian

Volkswagen China Investment Company

Beijing

Shanghai

DalianChangchun

Chengdu Nanjing

FAW-Volkswagen

Car production plants

Component plants

Headquarter Volkswagen Group China

3

Yizheng

Volkswagen FAW Platform

Urumqi

Shanghai Volkswagen

Foshan

FAW-Volkswagen

TianjinVolkswagen AutomaticTransmission Tianjin

Shanghai Volkswagen

Ningbo

SAIC Motor 50%, VW AG 50%

Successful partnership with FAW and SAIC

4

FAW 60%, VW AG 30%, AUDI AG 10%Share

1,319,000 unitsDeliveries

1991Foundation

Volkswagen

Santana Passat

Škoda

Fabia

Rapid

OctaviaSuperb

Touran

Tiguan

LavidaPolo

Share

1,304,000 unitsDeliveries

1985Foundation

Yeti

Gran Lavida

Volkswagen

Jetta

Sagitar MagotanNew Bora

CC Golf

Audi

Audi A4L Audi A6L Audi Q3 Audi Q5

Deliveries of Volkswagen in China from January to October 2013

51) incl. Hongkong; Source: Volkswagen Group China

Ʃ 2,480Ʃ 2,480

VW Group: 172

Locally Produced(‘000 Units)

Import FBU 1)

(‘000 Units)

FAW-VW

SVW

Total Deliveries Region China 2,652

1,236

1,244

Deliveries to customers by brand from January – October 2013*

8205

333199

399

2,018

2,652

0200400600800

1,0001,2001,4001,6001,8002,0002,2002,4002,6002,800

+15.4%

+19.9%-2.7%

30**

+17.2%

1,712

2,262 +17.9%

2013 Jan-Oct

2012 Jan-Oct

6

The overall sales performance is significantly

better than 2012 !

* figures including Porsche AG as from 1 August 2012

(‘000 Units)

** Jan – Oct 2013 Porsche sales volume +15.4% vs. Jan – Oct 2012

Rank Brand/GroupChanges of

market share(YTD)**

1 Volkswagen Group - 0.2%

2 Competitor 1 - 0.4%

3 Competitor 2 + 0.5%



21%

10%

10%

6%5%

30%

Volkswagen Group leading both Passenger and Premium Vehicle Market*

7

Comp.3Comp.4

Comp.2

Comp.1

Volkswagen GroupOthers(i.e. localbrands)

* China Mainland Market Share Jan.-Oct. 2013; Figures for the Group including Porsche AG as from 1 August 2012** Compared to last Year YTD

35%

26%

15%

5%5%

13%Rank Brand/Group

Changes ofmarket share

(YTD)**

1 Audi + 1.0%

2 Competitor 1 + 0.8%




AudiComp.3

Comp.4

Comp.2

Comp.1

China Passenger Vehicle MarketChina Passenger Vehicle Market

China Premium Vehicle MarketChina Premium Vehicle MarketOthers






8

Content

Source: Deutsche Bank, last update September 2013

7.4%

Q4/12Q1/12

7.9%

Q3/12

9.1%

Q2/12

7.6%8.1%

Q4/11

8.9%

Q3/11Q2/11

9.5%

Q1/11

9.7%

Q4/10

9.8%

Q3/10

9.6%

Q2/10

10.3%

Q1/10

11.9%

Q1/13 Q2/13 Q3/13 Q4/13E

7.7% 7.5% 7.8% 8.0%

2010 2011 2012 2013(forecast)

CAGR10.3%

CAGR9.2%

CAGR7.7%

CAGR7.8%

Q3 2013 GDP reached 7.8% growth year on year, and the economy is now on a path of stable growth

9

After a strong boom in the past years, passenger car market growth in China is stabilizing and will develop further in the future

10

Total Passenger Car Market –China (incl. HK)(‘000 Units)

* EstimateData Source: Volkswagen Group China / IHS Global Insight

>20.000

+35%+8%

+9%

+54%

CAGR +19%

2020E2013E2012

13.537

2011

12.388

2010

11.457

2009

8.482

2008

5.503

2003

2.266

2015E

CAGR 5-7%*

Current 5-year-plan: New growth model with focus on domestic market

11th 5-year-plan 2006-2010 12th 5-year-plan 2011-2015

Multi-National-Companies and infrastructure projects as growth generatorBig growth in manufacturing tradeJobs in cities to keep unemployment lowInternationally comparable price stability and well-adjusted foreign trade balance

Domestic consumption as growth acceleratorMegacities as growth generator Focus on environmental protection and energy efficiencyEncouragement of Chinese innovationsSocial stability due to balanced allocation of prosperity Selective policies for foreign investment as well as globalization of Chinese companies

Past:Focus on export and quantitative growth

Now:Focus on domestic market and qualitative growth

11

12th 5-year-plan 2011-2015

12

Low vehicle density in Level III and IV cities in China

ᴓ cars/1,000inhabitants

Number of cities

Level I citiesLevel I cities Level II citiesLevel II cities Level III citiesLevel III cities Level IV citiesLevel IV cities

BeijingShanghai

Guangzhou…

DalianXi´an

Changsha…

ShantouHengshui

Jingdezhen…

GuyuanYaan

Zhangyue…

8 47 167 74

14.7 7.6 4.0 2.3ᴓAverage # of

inhabitants (m)

GDP Growth development is expected to differentiate more strongly between the various Chinese regions

13Data Source: Provincial Government Report / Regional Government Media

Zhejiang

Heilongjiang

Jilin

Liaoning

Hebei Tianjin

Shandong

Guangdong

Hainan

Beijing

Shanghai

Yunnan

Sichuan

Shaanxi Gansu Qinghai

Xinjiang

GDP Growth 2013E12-15%

10-12%

7-10%

Tibet

Henan

Anhui

Jiangsu

Jiangxi Fujian

Hunan

Hubei

Inner Mongolia

Shanxi

Guangxi

Ningxia

Chongqing

Guizhou

Province GDP Growth 2013E (in %)

Total GDP 2012 (Trillion RMB)

Guizhou 14 0.68 Shaanxi 12.5 1.45 Gansu 12 0.57

Jilin 12 1.19 Inner Mongolia 12 1.60

Ningxia 12 0.23 Qinghai 12 0.19 Tianjin 12 1.29 Tibet 12 0.07

Yunnan 12 1.03 Chongqing 12 1.15

Fujian 11 1.97 Guangxi 11 1.30

Heilongjiang 11 1.37 Sichuan 11 2.38 Xinjiang 11 0.75 Anhui 10 1.72

Hainan 10 0.29 Henan 10 2.98 Hubei 10 2.23 Hunan 10 2.22

Jiangsu 10 5.41 Jiangxi 10 1.29 Shanxi 10 1.21

Liaoning 9.5 2.48 Shandong 9.5 5.00

Hebei 9 2.66 Beijing 8 1.78

Guangdong 8 5.71 Zhejiang 8 3.46 Shanghai 7.5 2.01

Chinese GDP growth per Province

Content






14

Go West and Go South Strategy for further growth

Existing vehicle production site

Planned vehicle production site

Urumqi

Chengdu

Changchun

NanjingYizheng

Shanghai

Ningbo

Foshan

Beijing

“Go South Strategy”

“Go West Strategy”

15

Changsha

Capacity expansion plans – on the way to 4 million units in 2018Standard capacity of 250 working days

16

4 million units

Capacity expansion plans are based on certain assumptions for the development of unit sales growth, upward flexibility (e.g. additional working days) and downward flexibility (e.g. postponement of expansion steps) are given.

FAW-VW

SVW

Implementation of MQB*) toolkit in Chinese production network

17

Octavia

Urumqi

Chengdu

Changchun

YizhengShanghai

Foshan

Beijing

Ningbo

Existing MQB production sitePlanned MQB production site

Nanjing

*) MQB: Modularer Querbaukasten / modular transversal toolkit

A3Golf

Start: 2013

MQB provides substantial

efficiency gains

Toolkit affords

Reduction of unit costsLower one-off expenditureLess engineered hours per vehicleSignificant weight and emission reduction

Flexibility in length, height, widthSignificant economies of scaleOpportunity for low volume niche modelsAlternative powertrain concepts

Changsha

Existing production site

Further strengthening of partnerships with SAIC and FAW

18

Signing ceremony May 26th, 2013 in BerlinConfirmed engagement in Changsha

Signing ceremony May 26th, 2013 in BerlinCapacity expansion in Foshan

SAIC FAW

Volkswagen Group China: Planned product portfolio in 2015 with more than 90 models

Note: number of product models

CKD>30 FBU >65 >95

19

Commercial Vehicles

Significant growth of dealer networks planned*

>3,000

2,054

* Map includes only Volkswagen, Audi and Škoda dealers; discrepancies may occur due to reporting backlog 20

Xinjiang

Tibet

Qinghai

Gansu Inner Mongolia

Shaanxi

NingxiaShanxi

Hebei

Guangdong

Fujian

Shanghai

Shandong

Liaoning

Jilin

Heilongjiang

Beijing

Zhejiang

Tianjin

GuizhouHunan

Jiangxi

Guangxi

Chongqing Hubei

Yunnan

Sichuan Anhui

Hainan

Henan Jiangsu84

102

45

54 98

37

86

3911

59

17660

13629

30

196

32

83

190

9

56

56

20

63

6

21

79

2558

7

34

Content






21

Volkswagen China – Product solutions to match our customer’s needs

Passat ChinaPassat USA

Passat Europe

Magotan China

Tiguan Europe

Tiguan China

Hunting Brown

Sandstone

22

China special detail solutionsChina special detail solutions

China specific wheelbase extensions + trim China specific colorsChina specific wheelbase extensions + trim China specific colors

Volkswagen China – Product solutions to match our customer’s needs

23

New Lavida New Jetta New SantanaNew Lavida New Jetta New Santana

Gran Lavida New BoraGran Lavida New Bora

24

Latest drivetrain and vehicle technologies of the Volkswagen Group for China

Drivetrain technologiesDrivetrain technologies

TSI® Downsizing DSG®

Optimized Automatic-Gearbox E-Mobility

Vehicle TechnologiesVehicle Technologies

Weight Reduction Optimized Aerodynamics Reduced electric power consumption Start-Stop

25

E-Scrub Process – Part of improvements with new technology E-Scrub Process – Part of improvements with new technology

Environmental Friendly Standard Factories

Heatrecovery

Renewableenergy

New Paint shops

Insulation

Cold watersystem

Energy-savinglightingsystems

Example FAW-VW FoshanExample FAW-VW Foshan

-22% -18%

CO2Energy

Water VOC*

-65%-23%

conventional processconventional process

process 2010Vprocess 2010V

Light Domes – improving lighting and saving electrical energy

Insulation of buildings for saving heating and cooling energy

First Chinese automotive plant with triple star Green Building Award

New Paint Shops - Savings through e.g. E-Scrub ProcessNew Paint Shops - Savings through e.g. E-Scrub Process

Consumption per Car

Advanced water treatment process –savings of 27% of fresh water demand through completed re-use of treated water

* Volatile organic compounds

Content






26

Volkswagen Group China reported another strong operating result for the first half of 2013

1) SVW Group/FAW-VW Group

Deliveries to Customers

Production (100%)1)

Operating profit (quotal)

(’000 Units)

(’000 Units)

(€ m)

1,400

1,387

831

2009 2010

1,923

1,914

1,907

2011

2,259

2,202

2,616

2012

2,813

2,643

3,678

27

Q1-Q3 2013

2,360

2,296

3,530

Challenges in a regulatory environment

28

Risk of restrictive policies for new car sales in developed Eastern Megacities

According to CAAM*, there are 8 more cities which will implement restriction policies; Hangzhou, Tianjin, Shijiazhuang and Wuhan

have already issued a draft to the public.

Shanghai

Beijing

Guangzhou

Quota (2013)

120k cars/year

240k cars/year

< 120k cars/year(not fixed)

Demanding requirements for fleet consumption

Details for Phase IV still under review

* China Association of Automobile Manufacturers

Volkswagen Group China has relevant strategies in place

29

Future growth prospects also coming from less developed regions and Tier 2-3 cities

Production and Dealer network extension will support

Growth in Western and Southern provinces

Different measures in place to realize the ambitious fleet consumption targets

New technologies and products will help to achieve targets

“Go South Strategy”

“Go West Strategy”

Engine andtransmissiontechnology

E-Traction

Vehiclemeasures

TSI

Downsizing

Dual clutch transmission

Recuperation

Start-Stop

Optimal ATM

Weight reduction

Aerodynamic optimization

Reduction of electricconsumption

Hybrid EVs

BEVs

Plug-in hybrid EVs

Additional business opportunities

30

Growing Chinese used car market Financial Services expects increase in retail finance share2)

Volkswagen Financial Services also aims to establish- Mobility packages- Long Term Rental & Fleet Business- Insurance Related & After Sales Services

2010

2.4

2016E2014E2012

+30% p.a.

2018E

20.0

million units

Total Used Car Market forecast1)

Roll out and Implementation of the successful Volkswagen Group used car brand “Das WeltAuto” in the Chinese dealer network

stronger finance demand expected

cash buyer dominance

1) Source: China Automotive Dealer Association 2) Based on the total passenger car sales in the market China

Volkswagen Group China

31

Volkswagen Group China is well positioned to maintain its number one position in the market and seize additional opportunities in the future

Delivered vehicles in million units

0

0,5

1

1,5

2

2,5

3

3,5

Disclaimer

This presentation contains forward-looking statements and information on the business development of the Volkswagen Group. These statements may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will” or words with similar meaning. These statements are based on assumptions relating to the development of the economies of individual countries, and in particular of the automotive industry, which we have made on the basis of the information available to us and which we consider to be realistic at the time of going to press. The estimates given involve a degree of risk, and the actual developments may differ from those forecast.

Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as in Western Europe (and especially Germany) or in the USA, Brazil or China, will have a corresponding impact on the development of our business. The same applies in the event of a significant shift in current exchange rates relative to the US dollar, sterling, yen, Brazilian real, Chinese renminbi and Czech koruna.

If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such statements.

We do not update forward-looking statements retrospectively. Such statements are valid on the date of publication and can be superceded.

This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.

32

volkswagen group china · 2020-06-20 · introduction of volkswagen group china (vgc) volkswagen...

Documents