SHANGHAI -- Volkswagen AG does not have the most attractive cars in Chinese consumers' eyes.
No VW-badged model won any of J.D. Power's China APEAL awards in 2009. In a market that grew 46 percent last year, VW's 36.7 percent sales increase looks like a mediocre feat.
But in China, Europe's biggest carmaker has one unrivalled strength over other brands. That is, its clear strategy on how to achieve long-term growth. That should enable VW to strengthen its lead here.
In a market that has been growing by an average of 16% per year, most automakers in China are too busy ramping up capacity to meet increasing demand to plan ahead.
The German automakers are different. They are good planners and willing to take the hassle to prepare for far ahead.
In 2005, Volkswagen Group China initiated a four-year-long "Olympic Program" aimed at integrating the purchasing activities and reducing costs of its two joint ventures; with Shanghai Automotive Industry Corp. and China FAW Group Corp.
After successfully completing the program, Volkswagen Group China launched "Strategy 2018" in February 2009, when the Chinese auto market had yet to recover from a temporary slowdown.
Under the strategy, VW committed to adding or renewing at lest four models each year and doubling the number of its joint ventures' dealerships to achieve 2 million vehicles sales by 2018.
With 2009 sales of 1,400,008 units, VW now commands a 13 percent share of the Chinese passenger vehicle market; a much bigger portion than any other automaker. It is now on track to achieve the targets set under the "Strategy 2018" well ahead of schedule.
So, what else will the company do to reinforce its position in China?
Early in January VW clearly spelt out what it will do over the next three years. In accompany statement, the carmaker said it will spend more than four billion euros on capacity expansion at the Nanjing and Chengdu plants, and on enhanced new product planning. Between 2010 and 2012 VW will also launch 20 new or updated models. Seven will go on sale this year.
VW's far-sightedness stands in marked contrast to the timid statements of its competitors. The plans issued by most other automakers are either vaguely worded, or they cannot tell you what they will do after 2010.
For an automaker to sustain business growth in a market as large as China, clear thinking and a long-term strategy are essential.