Feng Sihan, CEO of Volkswagen China: Last year, there was only a shortage of supply in the Chinese market, and there was no shortage of demand

Car stuff (public number: chedongxi)

The author | James

Edit the | Xiao Han

Following yesterday's Volkswagen Group NEW AUTO Annual Meeting, this afternoon volkswagen brands held an annual meeting called ACCELERATOR (acceleration), the theme of which is how the Volkswagen brand can accelerate from a traditional car company to a smart and electric mobility service provider.

The focus of today's annual meeting is clearly on Feng Sihan, CEO of Volkswagen Group China, who talked about Volkswagen's sales in China last year, the trend of electric vehicle sales, and the impact of chip shortages and the epidemic.

▲Feng Sihan, CEO of Volkswagen Group China

He said in particular: "In 2021, Volkswagen will only have a shortage of supply in the Chinese market, and there is no shortage of demand. ”

But he also mentioned the challenge of the Chinese market, that is, the user's requirements for electric vehicles are very high, in addition to electric performance, there is also the need for intelligent functions. As a result, Volkswagen has begun to form a software research and development team in China, and 6,000 people are developing software products for Volkswagen.

In addition to the news of the Chinese market, Volkswagen has also achieved fruitful results in the global market, and a number of ID. series pure electric models will be unveiled one after another.

First, the shortage of chips has led to less than expected delivery of electric vehicles Chinese customers are very demanding

China, as the main market for Volkswagen brands, received a lot of attention at the annual meeting, and Dr. Feng Sihan, CEO of Volkswagen Group China, participated in the live broadcast of the annual meeting through video link and answered questions from the global media.

Feng Sihan first introduced the achievements of volkswagen brands in China in 2021. He pointed out that Volkswagen's delivery volume is still the number one in the Chinese market, but 2021 is a tough year for the Volkswagen brand due to declining sales.

▲Volkswagen Group (China) CEO Feng Sihan video participated in the annual meeting

Feng Sihan particularly stressed that in 2021, Volkswagen will only have a shortage of supply in the Chinese market, and there is no shortage of demand. In March last year, volkswagen ID.4 was launched, and monthly sales nearly doubled until September last year compared with the previous month. However, in the fourth quarter of last year, ID.4 was affected by chip shortages, and some factories were affected by the new crown pneumonia epidemic, so sales did not meet expectations.

At the same time, there are similar situations in the field of fuel vehicles such as chip shortages and the impact of the epidemic. Taken together, Volkswagen lost some orders last year.

By 2022, as chip supply improves, deliveries are bound to rise.

Speaking of China's electric vehicle market, Feng Sihan said that compared with the European and American markets, there are too many electric vehicle brands in China that compete with each other. However, electric vehicles are still an early market. On the one hand, Chinese users have a great demand for cheap models, on the other hand, there is also a great demand for high-end cars, these two parts account for 60% of China's electric vehicle market.

Volkswagen sees a young, emerging market for electric vehicles, but Volkswagen has higher technical requirements, so it will not do the cheapest electric vehicle, but attract the domestic middle class.

Feng Sihan said that 20% of the electric models sold by Volkswagen are high-end models, the price point is relatively high, and the average age of electric vehicle buyers is 2 to 3 years lower than that of fuel vehicles. This is all positive information that makes Volkswagen electric vehicle sales better and better.

Feng Sihan also expressed a little concern that Chinese users have very high requirements for electric vehicles, in addition to electric performance, but also require cars to be more intelligent.

Therefore, Volkswagen meets the needs of Chinese users with better intelligent configuration. For example, ID. pure electric series models can be optional AR-HUD, the addition of AR technology makes the HUD display area larger, while more intuitive, the car machine system has OTA update capabilities, so that users continue to get new features.

In the field of autonomous driving, Volkswagen already has a clear evolutionary roadmap, and L2-level autonomous driving with more advanced functions will gradually start mass production.

In order to respond to the more intelligent needs of Chinese users, Volkswagen has strengthened domestic software research and development, and the current domestic software research and development team has 6,000 people. It is expected that in 12 to 15 months, the number of software developers will double. In the future, the software research and development results of the Chinese team will also be promoted to other countries.

In terms of electrification transformation and sales, Volkswagen has launched a special ID.6 model for the Chinese market, while targeting new customer groups. Feng Sihan said that Volkswagen has opened a new business model in China, selling electric vehicles through traditional 4S store channels, and also opening direct experience stores in shopping malls, so that brands can directly contact users.

At present, Volkswagen has opened 120 direct stores in the Chinese market. These stores are usually opened in shopping malls, have higher foot traffic, and increase customer conversion rates to about 50%.

▲Volkswagen executives were interviewed by the media

Feng Sihan expects that the shortage of chip supply will improve in April this year, and Volkswagen's sales level is expected to return to the level of 2020 after production resumes. This year, Volkswagen hopes to double its sales in China, while expanding its ID. pure electric agent stores and continuing to update OTA. By 2030, volkswagen's electric vehicles and traditional fuel vehicles will account for a ratio of 50:50.

Recently, the domestic epidemic prevention and control situation has become increasingly severe, which has also had a certain impact on Volkswagen production. Among them, the Shanghai Anting factory stopped production for 48 hours, and the factory employees were conducting nucleic acid testing for all employees. After the test is completed, the factory can start work again, and only a small number of employees may not be able to work normally.

At FAW-Volkswagen's Changchun plant, it has also taken measures to stop production for one day, and it is expected to resume tomorrow.

Feng Sihan pointed out that although the factory stopped production due to epidemic prevention and control, it can flexibly adjust the working hours and shifts later, and the suspension of production will not become a structural problem.

Second, a variety of ID. new cars are about to be listed, brand profitability has risen

Volkswagen Passenger Car Brand CEO Berryd announced Volkswagen's revenue data and future model plans for 2021.

▲Volkswagen passenger car brand CEO Berryed

Just last week, Volkswagen released ID.Buzz, which breathes new life into the eviction market with its retro styling, while also demonstrating the flexibility of the MEB platform. Volkswagen expects the car to reach 120,000 units per year in the future.

▲The new ID. pure electric concept car

At the Beijing Auto Show, Volkswagen will showcase the new concept car of the ID. pure electric series, which will have a more streamlined shape, the cruising range will reach 700km, and the interior space is also very spacious, and this car will be delivered to domestic users in 2023.

▲The public ID.Life

In 2025, Volkswagen will launch a front-drive version of the ID.Life model based on the MEB platform, which is positioned as an urban scooter. In the future, Volkswagen will also provide users with more electric vehicles in multiple market segments.

Looking at Volkswagen's global market, the Volkswagen brand sold a total of 4.9 million vehicles in 2021, down 8% year-on-year. But sales revenue increased to 76 billion euros (about 532 billion yuan), an increase of 5 billion euros (about 35 billion yuan) from the previous year, an increase of 7%.

At the same time, the return on business (ROS) excluding special items has also increased from 0.6% in 2020 to 3.3%, which means that Volkswagen's profitability is rising significantly. At present, Volkswagen has aimed for the 6% level of ROS in 2023.

▲Volkswagen ROS has been greatly improved

Operating profit, excluding special items, also increased from 500 million euros (about 3.5 billion yuan) in 2020 to 2.5 billion euros (about 17.5 billion yuan).

How to improve ROS? Volkswagen's answer is to strictly control costs while increasing sales of high-end models.

Conclusion: Volkswagen accelerates the transformation of electrification

As one of the world's largest car companies, Volkswagen has reached the head of the automotive industry in terms of market sales and revenue. In the face of the transformation trend of electrification, Volkswagen has successively launched a number of models, and relies on self-built charging networks and richer configurations to attract users to buy.

It can be said that among traditional car companies, Volkswagen's determination to electrify and transform is very strong. After the launch of more sincere models in the Chinese market to meet the needs of users, Volkswagen may once again stand on the peak of electric vehicles.