VW's new China chief sees vast growth potential
Heizmann: 'Our goal is to grow at least as fast as the market - and better yet faster.'
WOLFSBURG -- Despite slowing demand in China's automotive market, Jochem Heizmann, the new chief of Volkswagen China, expects industry sales to grow 7 to 8 percent annually. That's enough to justify the German automaker's ambitious plans to expand production, says Heizmann, who began his new assignment in September.
In an interview with Automobilwoche, a sister publication to Automotive News Europe, Heizmann spelled out his views of the Chinese market.
Do you believe there will be more growth in China?
Yes, clearly. In China alone, the auto industry has grown an unimaginable average of 20 percent over the past five years. In coming years, we now expect slower growth in the range of about 7 to 8 percent. That is still strong growth compared with the current situation in Europe. That is why we are very vigilant and watch everything in this fast-moving market very closely. Our goal is to grow at least as fast as the market -- and better yet faster.
Some major cities in China have restricted the ownership of cars. What effect will this have on VW?
These measures in China's metropolises have a clear effect on the market. In some cases, sales in the mega-cities are half what they would be if market demand were not limited. But the current restrictions should only have a limited effect on China's market potential overall. In the future, the greatest impetus for growth will come from smaller and medium-sized cities as well as the countryside.
Do you see the risk of overcapacity if VW increases its production volume in China to more than 4 million vehicles a year by 2018?
I don't see the danger of that. At this point, we are able to react very quickly. If the market were to develop completely differently from what we estimate, our internal tools will allow us to respond flexibly. And this is precisely the reason we have divided our investment plans into several stages of expansion.
What strategy is VW pursuing in electric mobility?
We will sell imported and locally produced plug-in hybrids in China. As part of an e-strategy tailor-made for the Chinese market, we are planning to build electric vehicles in China starting in 2014 and 2015. The first test fleet for Volkswagen brand cars started off in Beijing and is underway in the country.
Why has VW set up a special China department under its management board?
China is the VW Group's largest market and thus a key pillar in our global growth strategy. The significance of the Chinese market will continue to grow. From now on we will discuss and decide all the issues relating to our China business at the Group management board level. This increases our flexibility and simplifies the course of daily business significantly.