Volkswagen commercial vehicle adjustment strategy leveraging "take bit"

At present, the global economy has suffered a setback. From Europe, which has occupied nearly half of commercial vehicles sold by the general public, to emerging markets such as China and Latin America, the commercial vehicle business of the Volkswagen Group is experiencing downward pressure.

“The first global commercial vehicle championship that seized the top of Daimler” is the constant ambition of the Volkswagen Commercial Vehicle. In recent years, Volkswagen has already saved Scania and Man, two powerful players, through acquisitions, and added a lot of chances for it to “take a bite”.

However, today's deterioration of the external living environment has forced the public, which has already taken steps, to take measures to deal with it.

According to the German "Frankfurters" report, Liv Osterlin, executive director of Volkswagen Group's commercial vehicle business, has said that it will enhance the performance of its commercial vehicles, Scania and Mann brands in emerging markets such as China and Brazil. In order to cope with the decline in business, increasing the import vehicle business and establishing a truck joint venture in China are two possible measures that the general public can use to promote its business growth in China.
64% growth vitality

In the first eight months of this year, cumulative sales volume of commercial vehicle brands reached 362,200 units, an increase of 5.6% year-on-year, compared to 343,100 units sold in the same period last year.

In all regions, sales in Europe for the first eight months were 216,600 units, an increase of 4.7% year-on-year, and sales were 206,900 units in the same period last year.

In the first eight months of Western Europe, sales were 189,000 units, an increase of 2% year-on-year, and sales of 185,200 units in the same period last year. Among them, sales in Germany were 83,000 vehicles, an increase of 3.5% year-on-year, and 80200 vehicles in the same period of last year.

In the first eight months of Eastern Europe, sales were 27,600 units, an increase of 27.6% year-on-year, and sales of 21,600 units in the same period last year. Among them, Russia sold 10,700 vehicles, a substantial increase of 44%, and sales of 7,400 vehicles in the same period last year.

In the first eight months of the South American region, 96,100 units were sold, up 2.7% year-on-year, and sales were 93,600 units in the same period last year.

In the first eight months, Africa sold 13,000 vehicles, up 20.3% year-on-year, and sold 10,900 vehicles in the same period last year.

In the first eight months of the Asia-Pacific region, sales were 11,650 units, up 64% year-on-year, and sales were 7,100 units in the same period last year.

Although the sales volume of VW commercial vehicles in the Asia-Pacific region ranks last in its global business, the figure of “64%” year-on-year shows a strong growth momentum in the region.

Future survival "fertile soil"

This point was keenly captured by the general leadership.

Although Europe is still the main battlefield of commercial vehicles for the masses at this stage, it is inevitable that multinational commercial vehicle companies, including the general public, will gradually shift their strategic focus to these Southeast Asian markets with huge growth potential. These emerging markets are "fertile grounds" for their future survival.

Volkswagen Commercial Vehicles believes that there is tremendous growth potential in the Southeast Asian market. Its plan is to increase Daimler's position as the world's largest commercial vehicle company by improving its performance in emerging markets.

For so many years, the success of the Volkswagen passenger car segment in China has enabled the Volkswagen Group to fully appreciate the charm of the Chinese market. Therefore, in the emerging strategic market delineated by the public, China will undoubtedly be placed at the top of its strategy.

Osterlin said that in the future growth of the commercial vehicle business, most of the increase will come from emerging markets such as China and India. In the next 4% to 5% sales growth of the commercial vehicle business, most of the increase will come from emerging markets such as China and India. In terms of heavy trucks, Volkswagen can either increase direct imports from Europe or establish joint ventures in China to boost business growth in China.

In fact, Volkswagen has always wanted to expand the commercial vehicle business in China. In addition to Mann and Scania, Volkswagen’s independent commercial vehicle business unit (ie, commercial vehicle) began to enter as early as 3 years ago. The Chinese market has made preliminary preparations. No one wants to miss the opportunity to gain a share in the future heavy truck market in China. In particular, companies such as Daimler and Volvo have begun to reduce their "body size" in order to abandon the use of their own brands and lower their selling prices. In other ways to enter China, to seize more market share. Faced with this situation, if the public does not act again, it will also abandon the future in this market.

Strategic internal and external adjustment

The Volkswagen Group's commercial vehicle business currently includes the Volkswagen Commercial Vehicles Division, Scania, and Mann. Among them, Mann entered into a strategic partnership with China National Heavy Duty Truck Group in 2009 through its shareholding in Sinotruk. In April last year, Manchester United teamed up with China National Heavy Duty Truck to launch a new brand. The brand also targets the Chinese market (Purdaka) and the overseas emerging market (SITRAK).

Regarding the two measures that will be taken by the commercial vehicles of the mass commercial vehicle in China, the industry believes that, in fact, it is not necessary to put into operation in China. Currently, the tariff rates for the trucks produced by Mann and Scania in Europe to enter the Chinese market are only 6%.

At this time, if VW considers expanding its heavy truck business in China in a joint venture, it should also focus on the market opportunities after 5 years. Instead of selling volume in the past 3 to 5 years, it should establish reputation. The efficient logistics system needs huge information system support and it is difficult to establish in the short term.

Previously, although it was a competitor, Daimler and Volkswagen still had cooperation in light commercial vehicles. The former produced the Crafter van for the latter in the Düsseldorf factory in Germany. The annual production capacity was 40,000, and the model was connected with Mercedes-Benz. Linear Technology uses the same technology platform. The cooperation agreement between the parties will be terminated in 2016.

In March of this year, Volkswagen had stated that it may consider not extending the cooperation with Daimler and will not develop the subsequent model of the Crafter van. Foreign media believed that the reason was that Volkswagen had purchased Man Trucks in November last year and its technical power of commercial vehicles has been improved.

For Scania and Mann, two powerful players recovered from the outside, the Volkswagen Group does not intend to fully integrate its Scania and Mann truck brands, but strives to increase the degree of cooperation between the two.

The former Scania CEO and now executive director of Volkswagen Group's truck business, Osterlin, has clearly conveyed the public's plans for Scania and Man. Osterlin said that Mann and Scania have different types of customer base in the traditional sense, and therefore they need to maintain their independent status. The public does not intend to completely merge the two. Compared with “integration”, the public prefers “joint”. . He also said that such a goal has now been fully supported by the chairman of the Supervisory Board of the Volkswagen Group.

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