Et is a glamorous location that Volkswagen has chosen for the “world premiere” of its hopeful model. Nowhere else is China more beautiful, more expensive, more international than on Shanghai’s West Bund, where luxury apartments are next to the spectacularly designed art museums of Chinese billionaires.
On the promenade on the banks of the Huangpu during the art fair in autumn, Western luxury brands compete alongside the world’s leading gallery owners for the customers of the up-and-coming nation of billions. Star architect David Chipperfield built an offshoot of the Center Pompidou here, which French President Emanuel Macron personally opened a few weeks before the start of the corona pandemic.
When the ID.7 drives onto the stage in front of the assembled VW board of directors in an event hall on Monday evening, before the world’s largest auto show opens in Shanghai the next morning, the Germans want to present their masterpiece, which combines all the works of art on the Bund in puts it in the shade: an electrically powered luxury sedan with dimensions that come close to Mercedes’ S-Class, a range of 700 kilometers and air conditioning that recognizes the position of the sun and cools the car down as soon as the driver approaches it.
Annoyingly, the regulator in Beijing responsible for the approval of new cars already published pictures of the undisguised ID.7 on the Internet on Tuesday, which many Chinese did not want to come across as a world sensation. On the contrary: the most common comment was that the ID.7 resembles the “C01” like one egg in another. The e-car from the manufacturer Leapmotor from Hangzhou, a two-hour drive from Shanghai, has been on the market since last year. A bad suspicion is spreading in the country where VW sells more vehicles than anywhere else in the world: have the Germans copied from a Chinese start-up?
Strong headwind for Wolfsburg
So that’s how far things have come in the “second home” of the VW Group. In a new book (“China, my father and I”), the journalist Felix Lee described how the Chinese engineering minister appeared in front of the VW factory gate in Wolfsburg in 1978. The Germans quickly became the top dogs in China, and no one could get past them. At the same time, dependency on the People’s Republic grew, where the group now sells four out of ten of its cars.
Still. Because in the fast-growing e-car market, VW is a nobody. The proportion of Germans is 2.7 percent, not much more than Leapmotor, a manufacturer whose cars have only been available for sale for four years. Last week on Chinese state television, the governor of the Wolfsburg brand was asked repeatedly why Chinese car buyers should choose a VW. Finally, the answer that VW had been selling cars in the country for 40 years left the young reporter clearly dissatisfied. Maybe no longer having an advantage through technology, but one through trust in German honesty: This sales argument does not seem to impress the innovation-obsessed Chinese particularly, as a look at the sales statistics shows.
Of course, CEO Oliver Blume, who has to save what may not be saved in Shanghai next week, also knows that. After all, even in the conventional bread-and-butter business with the old petrol engines, customers are running away from VW in its “second home”. The group sold more than 4 million cars in the best times in the country, today it is 1 million less. Last fall, VW lost the title of market leader in China to BYD. The manufacturer from Shenzhen doesn’t make a big deal out of the fact that they can actually call the country home. Instead, BYD has achieved annual growth rates of almost 90 percent with powerful and affordable electric cars.
For VW, on the other hand, it could soon go down much faster in the world’s largest car market. The group is already rapidly losing shares there. While the overall Chinese market remained on course for recovery last year and largely left the Corona valley behind, VW sales continued to fall by around 4 percent. And according to figures from IHS, the downward pull could accelerate. The experts at the London analysis company are predicting a significant minus of around 9 percent for the group in the People’s Republic for the current year. The strategists at the Beijing national headquarters, it seems, have so far lacked any recipe for stopping the negative dynamic.
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