Volkswagen To Export Chinese Polos To Australia
in 2004
Beginning next year, Volkswagen will export Polos made
in China to Australia. The initial numbers are targeted
at 600 for the year, which is very small, but the symbolism
is large. To make sure that the message got out, Volkswagen
brought in reporters from all over the country to the
news event in Shanghai.
Up until now, Volkswagen has not considered exporting
from China because the quality of the autos was not there.
At the press conference, Dr. Folker Weissgerber, a member
of the company's board, said that Chinese joint venture
plants at one time had even higher costs than the company's
German plants, but now costs and quality were good enough
to export to Australia. The Polos will be right-hand drive
versions, and will be priced close to the Chinese yuan
120,000 (US$14,498) price they are sold for in China.
Over the past year, Australia has slashed import tariffs
for automobiles.
In 2003, China's vehicle production has gone past 4 million,
making it the third largest market in the world, after
the US and Japan. All leading international makers, including
Volkswagen
, BMW
, General
Motors and DaimlerChrysler
haved moved to increase their presence and production
to meet the needs of China's car buying public. All companies
have almost tripped over each other announcing more investments
in China this year. While most observers believe that
this will result in over-production in China, it is natural
for these companies to use China as an export base to
other markets.
China is an especially important market for Volkswagen.
The German company first came to set up a joint venture
plant in Shanghai in the early eighties, making the Santana
model, and establishing an early presence. Now, it is
estimated that China accounts for 80 percent of the parent
company's profits, because the China market is growing
in size, while Volkswagen is stagnant, or even falling
in other markets. Among many Chinese businessmen, there
is discussion that the German economic presence in China,
which is largely represented by Siemens and Volkswagen,
is responsible for propping up the German economy.
While this is certainly an exaggeration, it is true that
Germany attaches great importance to major projects and
trade ties with China. In December 2002, when the new
maglev train connecting downtown Shanghai to the Pudong
airport, built by Siemens, was dedicated, German chancellor
Gerhard Schroder took the first ride with then-premier
Zhu Rongji. At the conclusion of the trip, Schroder pointedly
asked the Chinese premier to give serious consideration
to German companies for other major projects.
Honda has a joint venture plant in Guangzhou manufacturing
Accords. The company has claimed that the quality of the
Accords coming from the Guangzhou plant is just as good
as the production from its Japanese plants, and it is
believed that before this year, when the local market
took off, some of the production was sold in Southeast
Asia.
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