Sunday, December 22, 2002

Why Volkswagen is the only successful foreign car company in China

Interesting article explaining what Volkswagen is doing different in China from other car companies.

"Most of all I found that Volkswagen has a ton of credibility for being willing to play by Chinese rules. This was the story I heard often (in relation to software as often as automotive). Chinese people, I was told, are sick of foreign companies coming in, exploiting the Chinese people, and then leaving with the loot. Other companies just try to siphon off as much as possible while leaving Chinese industry hollow, but Volkswagen is willing to work as equal peers with the local manufacturing outfits. Volkswagen was willing to recycle old models for the Chinese market and sell at Chinese prices, Volkswagen was willing to play the same hustle that Chinese manufacturers play, and so on. In contrast, the people I talked to seemed to think of the Japanese automakers as arrogant and exploitative. The way I see it, the Germans are just doing a much better job of doing business with China, because they have taken the time to understand the market."