Nis-Peter Iwersen’s Post

Here are four key points regarding #Volkswagen's progress in #China, based on the latest reports: 1. **Market Share**: Volkswagen has experienced a slight decrease in market share in China, from **15.1%** to **14.5%**. Despite this, they managed to increase vehicle deliveries by **1.6%** compared to the previous year, with a total of **3.2 million vehicles** delivered, including imports¹. 2. **Electric Vehicle (EV) Segment**: The EV segment is rapidly growing in China, and local manufacturers dominate this market, benefiting from significant government subsidies. Volkswagen's role in the EV market is relatively small, but they are making strides with models like the ID.3 and ID.4, which are among the top-selling electric vehicles². 3. **Innovation and Development**: Volkswagen is focusing on sustainable business models and has strengthened its development capabilities in China. The newly established Volkswagen China Technology Company (VCTC) aims to reduce the time to market for vehicles and components by **30%** through efficient development processes and advanced technologies¹. 4. **Competition and Challenges**: The Chinese market is highly competitive with over **100 local competitors**. Volkswagen is facing challenges due to the rise of local brands, which are innovating and gaining market share, partly due to state subsidies. However, Volkswagen is responding by enhancing its product portfolio and focusing on the 'in China for China' approach to cater to local market needs². These points highlight the complexities of #Volkswagen's situation in #China, balancing between competition, market dynamics, and strategic shifts towards electrification and innovation.

Excited to share that anp Management Consulting's in-depth analysis of China's #automotiveproduction landscape was published today in #Automobilwoche Online! 🇨🇳🚗 Some key findings from the study: China has built up massive automotive production capacity, with 169 passenger car factories able to produce nearly 30 million vehicles annually. In 2023, around 26.1 million passenger cars were produced in China, of which about 5 million were exported. The top 15 #OEMs in #China operate 102 of the 169 auto plants and dominate the production landscape. Geely has the largest production capacity with 13 factories able to make up to 2.7 million cars per year, followed by Great Wall Motors (2M) and #BYD (1.8M). 32.5% of China's auto plants are concentrated in just 3 eastern coastal provinces: #Guangdong, #Jiangsu and #Zhejiang. China's overcapacity and regional concentration pose major challenges for the industry going forward. China's auto industry has grown tremendously, but also faces challenges ahead as it seeks to utilize #overcapacity and expand globally. With a dedicated team of 40 specialists in #marketintelligence and #competitiveintelligence, ANP is uniquely positioned to provide #OEMs and Automotive #Suppliers with in-depth and investigative insights needed to navigate the complexities of the #Chinese #market. Read the full article for more insights: https://lnkd.in/ey3ndR62 #ChinaAutoIndustry #AutoIndustryAnalysis #AutoProduction #AutoCapacity #anpManagementConsulting #China #NEV #eMobility https://lnkd.in/ey3ndR62

❗ Strongly recommended read! 📰 Featured as part of the Handelsblatt's latest coverage from the Beijing Auto Show, our Managing Director Johannes Trenka shares his insights on how German automakers can successfully navigate the Chinese market given the dynamic and challenging environment, fueled by decreasing price levels. ➡ Read the full article (in German) here: https://lnkd.in/esG8akg8

Following intensive negotiations between Volkswagen AG, IG Metall and the Works Council, a joint agreement entitled ‘Zukunft Volkswagen’ (Future Volkswagen) has been concluded. Together, the company and the Works Council are positioning Volkswagen AG for sustainable success. ➡️ We’re reducing our production capacity in Germany by 734,000 units. ➡️ We’re lowering labour costs by 1.5 billion EUR per year. The workforce at Volkswagen AG will be reduced by more than 35,000 by 2030 in a socially responsible manner. This includes a newly formulated job security plan through to 2030. Our goal is to become the technologically leading volume manufacturer globally by 2030. 💪 #Volkswagen

Volkswagen Zukunft: Driving Towards 2030 🚗🔋 Volkswagen's "#Zukunft #Volkswagen" strategy sets ambitious goals for the company by 2030, aiming to position itself as the technologically leading volume manufacturer globally. The strategy outlines sweeping changes in production, workforce, and sustainability initiatives, as Volkswagen works to adapt to the evolving automotive landscape. Key Strategic Pillars: €15 Billion in Annual Savings: Volkswagen plans to achieve €15 billion in savings by the medium term, with €1.5 billion coming annually from labour cost reductions. This will be crucial for improving financial performance and remaining competitive in a fast-evolving industry. Production Adjustments: Volkswagen will reduce production capacity at its German plants by 734,000 units, aligning manufacturing with changing market demands and global competition. The shift could include expanding production in Mexico, reflecting global production optimization. Workforce Realignment: Volkswagen has committed to reducing over 35,000 jobs in Germany by 2030, with job security guaranteed until that date. While this decision reflects the need to streamline operations, the company is balancing it with social responsibility. Electric Mobility Focus: The future of Volkswagen is electric. The company is focusing on expanding its lineup with models like the ID.3, ID.4, and ID.7, which will anchor the brand’s transition to a sustainable, electric future. Financial Resilience: Structural and production optimizations will drive €4 billion in annual savings, improving Volkswagen's financial resilience while ensuring long-term profitability. Strategic Implications: Volkswagen's Zukunft strategy is both ambitious and necessary in an industry undergoing significant technological disruption. The shift to electric mobility is a critical element of this transformation, ensuring Volkswagen’s position in the sustainable mobility market. However, the company must carefully manage the impact of job reductions and production cuts while maintaining brand loyalty and employee trust. As Volkswagen faces rapid technological advancements and shifting consumer preferences, the company is taking bold steps to remain competitive, sustainable, and financially strong. Can Volkswagen Lead the Charge in Sustainable Mobility? ⚡🚙 Volkswagen’s roadmap for 2030 will shape its future in the rapidly evolving automotive industry. The success of this strategy will depend on how well the company executes its cost-saving initiatives, navigates the workforce realignment, and strengthens its position in the growing electric vehicle market. #Volkswagen #ZukunftVolkswagen #ElectricMobility #Sustainability #AutomotiveInnovation #EV #Manufacturing #JobSecurity #IndustryTransformation #2030Goals #SustainableFuture

Volkswagen Zukunft: Driving Towards 2030 Volkswagen has unveiled its new strategy under the "Zukunft Volkswagen" agreement. By 2030, Volkswagen aims to become the technologically leading volume manufacturer globally. - €15 billion in annual savings targeted in the medium term, with €1.5 billion per year from labour cost reductions. - Production capacity at German plants to be reduced by 734,000 units, adapting to market realities and global competition. Shift to Mexico? - Workforce realignment includes a socially responsible reduction of over 35,000 jobs in Germany by 2030, with job security ensured until the same year. - A focus on electric mobility: models like the ID.3, ID.4, and ID.7 to anchor the brand’s future lineup. - Strengthening financial resilience with €4 billion in cost effects annually through structural and production optimizations. Volkswagen’s strategy is both ambitious and necessary. In a market characterized by rapid technological advancements and shifting consumer demands, it is taking hard steps to balance profitability, sustainability, and its commitment to employees. Can Volkswagen’s transformative roadmap successfully position it as the leader in sustainable and innovative mobility?

I was given the opportunity to attend the Internationale Zuliefererbörse (IZB) in Wolfsburg with my colleagues this week. We met with German and international suppliers. These companies are current and potential AUDI AG suppliers that are developing new and improving current technologies in combustion and electric vehicles. The implementation of these technologies improve the comfort and safety of the passengers through advanced interior sensors and seat control units to name a few. Additionally, advancements in interior cameras that analyzes the driver’s eyes and body movements that can identify fatigue to warn the driver of their physical state. This feature can be implemented in the future to increase driver awareness and safety. Collaboration and synergies between suppliers and customers were one of the big talking points at the fair. As raw materials in vehicle manufacturing have become increasingly expensive throughout the years, the importance of supplier and manufacturer collaboration and synergy is ever so important in the financial sustainability and future of companies globally.

Volkswagen announces before German Chancellor Olaf Scholz's trip to China that it will invest 2.5 billion euros in its facility in Hefei, which is becoming a major production and innovation hub for the company. Our recent Tipping Point note (https://lnkd.in/dYtyynnY) highlights the emerging trend in which German firms are ramping up investments in China and cutting jobs at home. This dynamic is weakening the link between German corporate success in China and economic prosperity in Germany. We expect this to have an important impact on the China debate in Germany in the years ahead. https://lnkd.in/dJeza53D

According to WDK "...German automotive suppliers have been assessing their economic situation as increasingly worse since the beginning of 2022, almost without interruption. And are now heading towards an all-time low." Additionally, the news that VW is considering factory closures to offset the declining profit margins highlights the growing economic challenges facing the German automotive industry. When can we expect a turning point for this crucial sector?

You have to run a smart race in China! 🏃🏼♂️🧠🇨🇳 I had the chance to share insights on China’s rapidly evolving market with ther German business newspaper Handelsblatt. Here’s a quick snapshot of my key messages: 1️⃣A Market Distorted by Discounts: Chinese manufacturers have seized their opportunity in electric mobility and gained market shares - but at a high cost. Their EVs are being sold at huge discounts making it challenging for anyone to generate sufficient profit from EVs in China. ▶️We are not pursuing growth at any price in this unhealthy environment. Our success metric is profitability, not simply market share. 2️⃣Ability to Balance Sales as Key Advantage: Almost all “new forces” rely solely on the electric car market, often selling at a substantial loss or not at all. ▶️We can balance our sales. The market transforms towards EVs at a rapid pace but ICE vehicles will still play a significant role. With our profitable models, this is where we generate funds for our transformation while simultaneously accelerating our e-offensive. 3️⃣Eyes on 2030, Not Just Today: In this fast-paced and distorted market, starting quickly doesn't guarantee finishing first. The key is who will have secured a strong market position by the end of the decade. And for that, you have to run a smart, sustained race. ▶️We have a strong plan for the future, our Target picture 2030. And we’re heading into a “delivery mode.” While we plan with 2 challenging years ahead, we are preparing for a major technology leap and product launch wave from 2026 onward. By 2027, our Group will have introduced a total of 40 new models in China, 20 of which will be New Energy Vehicles. 4️⃣China as a Strategic Global Asset: As the leading market for EVs, digitalization, and autonomous driving, China offers unique opportunities. While a lot of international companies pull back, we are integrating ourselves into the local ecosystem even more with our "In China for China" strategy. ▶️Not having a strong presence here would mean missing out on opportunities. The knowledge we are building up there helps the entire Group. This is why our position in China serves as a strategic advantage for us on a worldwide scale. Thank you Handelsblatt and Lazar Backovic for the conversation.