Volkswagen weighs expansion for China budget-car brand Jetta
[FRANKFURT] Volkswagen (VW) is exploring options to expand its new Chinese entry-level brand Jetta, including potentially taking it beyond the world's largest car market.
Eight months after its introduction, Jetta has claimed about 1 per cent of the Chinese market as younger, price-sensitive customers buy cars to avoid public transport following the coronavirus outbreak, Harald Mueller, the brand's president, told reporters this week.
"The successful start has of course also sparked interest from other markets in the Volkswagen world," Mr Mueller said.
VW struggled for years to develop no-frills cars for emerging markets because high technology costs made it difficult to roll out price-competitive vehicles in the budget segment. The company eventually opted for a two-pronged approach: It tapped the cachet of its Jetta sedan - popular in Europe and the US for decades - to establish an affordable marque for its largest market China, while sister brand Skoda focused on India.
China's entry-level segment is largely dominated by domestic manufacturers from Great Wall Motor Co to Geely Automobile Holdings as well as other Asian brands. It accounts for about 30 per cent of the country's total market, and about 80 per cent of those buying an entry-level vehicle are purchasing their first car, according to VW.
Jetta's current lineup comprises two sport utility vehicles and one sedan, built at VW's joint venture with FAW Car in Chengdu. Volkswagen, the world's largest carmaker, has a total market share of about 20 per cent in China.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
BLOOMBERG
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Transport & Logistics
Porsche posts Q1 profit drop on ramp-up costs
Air China orders homegrown C919s in challenge to jet duopoly
Huawei’s smart car tech offers automakers route to China sales
Sri Lanka to hand management of China-built airport to India, Russia companies
Tesla’s plan for affordable cars takes page from Detroit rivals
Toyota is investing US$1.4 billion to build another all-electric SUV in US