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February 12, 2009

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I like to demonstrate briefly.

Why was Volkswagen so successful in China while other companies like U.S. AMC Jeep Corporation failed?

Shanghai Volkswagen is a joint venture between the German Volkswagen AG and a consortium of Chinese partners. The 25-year agreement signed by the partners in the middle of 1980s provided for 50% Volkswagen AG equity in the venture. By 2001, this cooperation was the most successful automobile venture in China. Attempts by the U.S. AMC Jeep Corporation and other car makers failed. While other companies were attracted by the potential swift, huge returns because of the large Chinese population of 1.2 billion people (certainly only a very small percentage would be customers), Volkswagen built the venture gradually over the years. By 2001, it had achieved a market share of over 50% as a result of introducing "hot"models and assuring reliable service. But a great deal of effort was necessary to build up this market.

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