volkswagen group china · 2020-06-20 · introduction of volkswagen group china (vgc) volkswagen...
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Volkswagen Group ChinaDr. Jörg Mull, Executive Vice President, Finance
HSBC Roadshow, HongkongDecember 09th, 2013
Our Momentum in China
Outlook Market Development
Investments Volkswagen Group China
Driven by Design and Technology
Financial results, challenges and opportunities
2
Content
Introduction of Volkswagen Group China (VGC)
Volkswagen production facilities in China History
1985: Founding of Shanghai Volkswagen Automotive Co. (SVW) as joint venture with Shanghai Automotive Industrial Corporation (SAIC). 10 million vehicles produced as of November 2013.
1991: Founding of FAW-Volkswagen Automotive Co. Ltd. (FAW-VW) as second joint venture with First Automotive Work (FAW). 8 million vehicles produced as of October 2013.
2004: Founding of Volkswagen Group China for coordination and management of activities of Volkswagen Group within China.
Total investments 1985-2013Planned Investments 2014-2018Employees 2012
€ 18.5 Billion€ 18.2 Billion
74,500
Volkswagen Transmission
Shanghai VolkswagenPowertrain
FAW-Volkswagen(Volkswagen, Audi)
Volkswagen FAW Engine
Volkswagen FAW Platform
Shanghai VolkswagenShanghai Volkswagen(Volkswagen, ŠKODA)
Volkswagen AutomaticTransmission Dalian
Volkswagen China Investment Company
Beijing
Shanghai
DalianChangchun
Chengdu Nanjing
FAW-Volkswagen
Car production plants
Component plants
Headquarter Volkswagen Group China
3
Yizheng
Volkswagen FAW Platform
Urumqi
Shanghai Volkswagen
Foshan
FAW-Volkswagen
TianjinVolkswagen AutomaticTransmission Tianjin
Shanghai Volkswagen
Ningbo
SAIC Motor 50%, VW AG 50%
Successful partnership with FAW and SAIC
4
FAW 60%, VW AG 30%, AUDI AG 10%Share
1,319,000 unitsDeliveries
1991Foundation
Volkswagen
Santana Passat
Škoda
Fabia
Rapid
OctaviaSuperb
Touran
Tiguan
LavidaPolo
Share
1,304,000 unitsDeliveries
1985Foundation
Yeti
Gran Lavida
Volkswagen
Jetta
Sagitar MagotanNew Bora
CC Golf
Audi
Audi A4L Audi A6L Audi Q3 Audi Q5
Deliveries of Volkswagen in China from January to October 2013
51) incl. Hongkong; Source: Volkswagen Group China
Ʃ 2,480Ʃ 2,480
VW Group: 172
Locally Produced(‘000 Units)
Import FBU 1)
(‘000 Units)
FAW-VW
SVW
Total Deliveries Region China 2,652
1,236
1,244
Deliveries to customers by brand from January – October 2013*
8205
333199
399
2,018
2,652
0200400600800
1,0001,2001,4001,6001,8002,0002,2002,4002,6002,800
+15.4%
+19.9%-2.7%
30**
+17.2%
1,712
2,262 +17.9%
2013 Jan-Oct
2012 Jan-Oct
6
The overall sales performance is significantly
better than 2012 !
* figures including Porsche AG as from 1 August 2012
(‘000 Units)
** Jan – Oct 2013 Porsche sales volume +15.4% vs. Jan – Oct 2012
Rank Brand/GroupChanges of
market share(YTD)**
1 Volkswagen Group - 0.2%
2 Competitor 1 - 0.4%
3 Competitor 2 + 0.5%
4 Competitor 3 - 0.3%
5 Competitor 4 - 0.5%
21%
10%
10%
6%5%
30%
Volkswagen Group leading both Passenger and Premium Vehicle Market*
7
Comp.3Comp.4
Comp.2
Comp.1
Volkswagen GroupOthers(i.e. localbrands)
* China Mainland Market Share Jan.-Oct. 2013; Figures for the Group including Porsche AG as from 1 August 2012** Compared to last Year YTD
35%
26%
15%
5%5%
13%Rank Brand/Group
Changes ofmarket share
(YTD)**
1 Audi + 1.0%
2 Competitor 1 + 0.8%
3 Competitor 2 - 1.1%
4 Competitor 3 - 0.1%
5 Competitor 4 - 1.4%
AudiComp.3
Comp.4
Comp.2
Comp.1
China Passenger Vehicle MarketChina Passenger Vehicle Market
China Premium Vehicle MarketChina Premium Vehicle MarketOthers
Our Momentum in China
Outlook Market Development
Investments Volkswagen Group China
Driven by Design and Technology
Financial results, challenges and opportunities
8
Content
Source: Deutsche Bank, last update September 2013
7.4%
Q4/12Q1/12
7.9%
Q3/12
9.1%
Q2/12
7.6%8.1%
Q4/11
8.9%
Q3/11Q2/11
9.5%
Q1/11
9.7%
Q4/10
9.8%
Q3/10
9.6%
Q2/10
10.3%
Q1/10
11.9%
Q1/13 Q2/13 Q3/13 Q4/13E
7.7% 7.5% 7.8% 8.0%
2010 2011 2012 2013(forecast)
CAGR10.3%
CAGR9.2%
CAGR7.7%
CAGR7.8%
Q3 2013 GDP reached 7.8% growth year on year, and the economy is now on a path of stable growth
9
After a strong boom in the past years, passenger car market growth in China is stabilizing and will develop further in the future
10
Total Passenger Car Market –China (incl. HK)(‘000 Units)
* EstimateData Source: Volkswagen Group China / IHS Global Insight
>20.000
+35%+8%
+9%
+54%
CAGR +19%
2020E2013E2012
13.537
2011
12.388
2010
11.457
2009
8.482
2008
5.503
2003
2.266
2015E
CAGR 5-7%*
Current 5-year-plan: New growth model with focus on domestic market
11th 5-year-plan 2006-2010 12th 5-year-plan 2011-2015
Multi-National-Companies and infrastructure projects as growth generatorBig growth in manufacturing tradeJobs in cities to keep unemployment lowInternationally comparable price stability and well-adjusted foreign trade balance
Domestic consumption as growth acceleratorMegacities as growth generator Focus on environmental protection and energy efficiencyEncouragement of Chinese innovationsSocial stability due to balanced allocation of prosperity Selective policies for foreign investment as well as globalization of Chinese companies
Past:Focus on export and quantitative growth
Now:Focus on domestic market and qualitative growth
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12th 5-year-plan 2011-2015
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Low vehicle density in Level III and IV cities in China
ᴓ cars/1,000inhabitants
Number of cities
Level I citiesLevel I cities Level II citiesLevel II cities Level III citiesLevel III cities Level IV citiesLevel IV cities
BeijingShanghai
Guangzhou…
DalianXi´an
Changsha…
ShantouHengshui
Jingdezhen…
GuyuanYaan
Zhangyue…
8 47 167 74
14.7 7.6 4.0 2.3ᴓAverage # of
inhabitants (m)
GDP Growth development is expected to differentiate more strongly between the various Chinese regions
13Data Source: Provincial Government Report / Regional Government Media
Zhejiang
Heilongjiang
Jilin
Liaoning
Hebei Tianjin
Shandong
Guangdong
Hainan
Beijing
Shanghai
Yunnan
Sichuan
Shaanxi Gansu Qinghai
Xinjiang
GDP Growth 2013E12-15%
10-12%
7-10%
Tibet
Henan
Anhui
Jiangsu
Jiangxi Fujian
Hunan
Hubei
Inner Mongolia
Shanxi
Guangxi
Ningxia
Chongqing
Guizhou
Province GDP Growth 2013E (in %)
Total GDP 2012 (Trillion RMB)
Guizhou 14 0.68 Shaanxi 12.5 1.45 Gansu 12 0.57
Jilin 12 1.19 Inner Mongolia 12 1.60
Ningxia 12 0.23 Qinghai 12 0.19 Tianjin 12 1.29 Tibet 12 0.07
Yunnan 12 1.03 Chongqing 12 1.15
Fujian 11 1.97 Guangxi 11 1.30
Heilongjiang 11 1.37 Sichuan 11 2.38 Xinjiang 11 0.75 Anhui 10 1.72
Hainan 10 0.29 Henan 10 2.98 Hubei 10 2.23 Hunan 10 2.22
Jiangsu 10 5.41 Jiangxi 10 1.29 Shanxi 10 1.21
Liaoning 9.5 2.48 Shandong 9.5 5.00
Hebei 9 2.66 Beijing 8 1.78
Guangdong 8 5.71 Zhejiang 8 3.46 Shanghai 7.5 2.01
Chinese GDP growth per Province
Content
Our Momentum in China
Outlook Market Development
Investments Volkswagen Group China
Driven by Design and Technology
Financial results, challenges and opportunities
14
Go West and Go South Strategy for further growth
Existing vehicle production site
Planned vehicle production site
Urumqi
Chengdu
Changchun
NanjingYizheng
Shanghai
Ningbo
Foshan
Beijing
“Go South Strategy”
“Go West Strategy”
15
Changsha
Capacity expansion plans – on the way to 4 million units in 2018Standard capacity of 250 working days
16
4 million units
Capacity expansion plans are based on certain assumptions for the development of unit sales growth, upward flexibility (e.g. additional working days) and downward flexibility (e.g. postponement of expansion steps) are given.
FAW-VW
SVW
Implementation of MQB*) toolkit in Chinese production network
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Octavia
Urumqi
Chengdu
Changchun
YizhengShanghai
Foshan
Beijing
Ningbo
Existing MQB production sitePlanned MQB production site
Nanjing
*) MQB: Modularer Querbaukasten / modular transversal toolkit
A3Golf
Start: 2013
MQB provides substantial
efficiency gains
Toolkit affords
Reduction of unit costsLower one-off expenditureLess engineered hours per vehicleSignificant weight and emission reduction
Flexibility in length, height, widthSignificant economies of scaleOpportunity for low volume niche modelsAlternative powertrain concepts
Changsha
Existing production site
Further strengthening of partnerships with SAIC and FAW
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Signing ceremony May 26th, 2013 in BerlinConfirmed engagement in Changsha
Signing ceremony May 26th, 2013 in BerlinCapacity expansion in Foshan
SAIC FAW
Volkswagen Group China: Planned product portfolio in 2015 with more than 90 models
Note: number of product models
CKD>30 FBU >65 >95
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Commercial Vehicles
Significant growth of dealer networks planned*
>3,000
2,054
* Map includes only Volkswagen, Audi and Škoda dealers; discrepancies may occur due to reporting backlog 20
Xinjiang
Tibet
Qinghai
Gansu Inner Mongolia
Shaanxi
NingxiaShanxi
Hebei
Guangdong
Fujian
Shanghai
Shandong
Liaoning
Jilin
Heilongjiang
Beijing
Zhejiang
Tianjin
GuizhouHunan
Jiangxi
Guangxi
Chongqing Hubei
Yunnan
Sichuan Anhui
Hainan
Henan Jiangsu84
102
45
54 98
37
86
3911
59
17660
13629
30
196
32
83
190
9
56
56
20
63
6
21
79
2558
7
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Content
Our Momentum in China
Outlook Market Development
Investments Volkswagen Group China
Driven by Design and Technology
Financial results, challenges and opportunities
21
Volkswagen China – Product solutions to match our customer’s needs
Passat ChinaPassat USA
Passat Europe
Magotan China
Tiguan Europe
Tiguan China
Hunting Brown
Sandstone
22
China special detail solutionsChina special detail solutions
China specific wheelbase extensions + trim China specific colorsChina specific wheelbase extensions + trim China specific colors
Volkswagen China – Product solutions to match our customer’s needs
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New Lavida New Jetta New SantanaNew Lavida New Jetta New Santana
Gran Lavida New BoraGran Lavida New Bora
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Latest drivetrain and vehicle technologies of the Volkswagen Group for China
Drivetrain technologiesDrivetrain technologies
TSI® Downsizing DSG®
Optimized Automatic-Gearbox E-Mobility
Vehicle TechnologiesVehicle Technologies
Weight Reduction Optimized Aerodynamics Reduced electric power consumption Start-Stop
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E-Scrub Process – Part of improvements with new technology E-Scrub Process – Part of improvements with new technology
Environmental Friendly Standard Factories
Heatrecovery
Renewableenergy
New Paint shops
Insulation
Cold watersystem
Energy-savinglightingsystems
Example FAW-VW FoshanExample FAW-VW Foshan
-22% -18%
CO2Energy
Water VOC*
-65%-23%
conventional processconventional process
process 2010Vprocess 2010V
Light Domes – improving lighting and saving electrical energy
Insulation of buildings for saving heating and cooling energy
First Chinese automotive plant with triple star Green Building Award
New Paint Shops - Savings through e.g. E-Scrub ProcessNew Paint Shops - Savings through e.g. E-Scrub Process
Consumption per Car
Advanced water treatment process –savings of 27% of fresh water demand through completed re-use of treated water
* Volatile organic compounds
Content
Our Momentum in China
Outlook Market Development
Investments Volkswagen Group China
Driven by Design and Technology
Financial results, challenges and opportunities
26
Volkswagen Group China reported another strong operating result for the first half of 2013
1) SVW Group/FAW-VW Group
Deliveries to Customers
Production (100%)1)
Operating profit (quotal)
(’000 Units)
(’000 Units)
(€ m)
1,400
1,387
831
2009 2010
1,923
1,914
1,907
2011
2,259
2,202
2,616
2012
2,813
2,643
3,678
27
Q1-Q3 2013
2,360
2,296
3,530
Challenges in a regulatory environment
28
Risk of restrictive policies for new car sales in developed Eastern Megacities
According to CAAM*, there are 8 more cities which will implement restriction policies; Hangzhou, Tianjin, Shijiazhuang and Wuhan
have already issued a draft to the public.
Shanghai
Beijing
Guangzhou
Quota (2013)
120k cars/year
240k cars/year
< 120k cars/year(not fixed)
Demanding requirements for fleet consumption
Details for Phase IV still under review
* China Association of Automobile Manufacturers
Volkswagen Group China has relevant strategies in place
29
Future growth prospects also coming from less developed regions and Tier 2-3 cities
Production and Dealer network extension will support
Growth in Western and Southern provinces
Different measures in place to realize the ambitious fleet consumption targets
New technologies and products will help to achieve targets
“Go South Strategy”
“Go West Strategy”
Engine andtransmissiontechnology
E-Traction
Vehiclemeasures
TSI
Downsizing
Dual clutch transmission
Recuperation
Start-Stop
Optimal ATM
Weight reduction
Aerodynamic optimization
Reduction of electricconsumption
Hybrid EVs
BEVs
Plug-in hybrid EVs
Additional business opportunities
30
Growing Chinese used car market Financial Services expects increase in retail finance share2)
Volkswagen Financial Services also aims to establish- Mobility packages- Long Term Rental & Fleet Business- Insurance Related & After Sales Services
2010
2.4
2016E2014E2012
+30% p.a.
2018E
20.0
million units
Total Used Car Market forecast1)
Roll out and Implementation of the successful Volkswagen Group used car brand “Das WeltAuto” in the Chinese dealer network
stronger finance demand expected
cash buyer dominance
1) Source: China Automotive Dealer Association 2) Based on the total passenger car sales in the market China
Volkswagen Group China
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Volkswagen Group China is well positioned to maintain its number one position in the market and seize additional opportunities in the future
Delivered vehicles in million units
0
0,5
1
1,5
2
2,5
3
3,5
Disclaimer
This presentation contains forward-looking statements and information on the business development of the Volkswagen Group. These statements may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will” or words with similar meaning. These statements are based on assumptions relating to the development of the economies of individual countries, and in particular of the automotive industry, which we have made on the basis of the information available to us and which we consider to be realistic at the time of going to press. The estimates given involve a degree of risk, and the actual developments may differ from those forecast.
Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as in Western Europe (and especially Germany) or in the USA, Brazil or China, will have a corresponding impact on the development of our business. The same applies in the event of a significant shift in current exchange rates relative to the US dollar, sterling, yen, Brazilian real, Chinese renminbi and Czech koruna.
If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such statements.
We do not update forward-looking statements retrospectively. Such statements are valid on the date of publication and can be superceded.
This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.
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