Volkswagen will develop a new car uniquely for the Chinese market based on the success of Audi AG's A6, currently the top-selling luxury car in the country. The A6 model in China is said to have a longer cache than the A6 cars found in other parts of the globe; it has more spacious leg room and definitely beats most of its rivals in terms of size.
Volkswagen plans to replicate the success of Audi in luxury vehicles.
"Volkswagen wants to boost its brand value, which is natural for any company seeking higher margins. But it's not easy," said Yale Zhang, managing director at consultancy Automotive Foresight.
The German automaker thinks about going upmarket as the demand for high-end cars seems to be a growing trend among the Chinese public officials. China, however, is conducting a crackdown on extravagance and targets public officials in the move. Volkswagen sees the situation as an opportunity to enter the luxury vehicles market while maintaining its reputation of producing affordable vehicles. Undoubtedly, the scheme has gained a favorable result among those who are looking for a luxury car but do not want to be perceived as having an opulent lifestyle.
"Selling luxury cars makes for fatter profit," an anonymous source says. "Premium models under the Volkswagen brand will be especially attractive to those who want a superior car but don't want to catch too much attention."
Volkswagen's upcoming premium car is said to carry the 511 code name. Though it is designed in Europe, it will be the company's first large "C-class" sedan that will be manufactured by Shanghai Volkswagen, which has a joint business with SAIC in China.
A spokeswoman at the China headquarters of Volkswagen confirmed that the company is indeed working on a C-class car. Other than that, there were no details provided. SAIC Motor also provided no comment.
In the meantime, Shanghai Volkswagen is the maker of Santana, touted as the second biggest selling compact sedan in China this year based on the research made by LMC Automotive. However, FAW Volkswagen Automobile, which is the German automaker's joint business with the China-based FAW, is more profitable since it builds the popular Audi cars.
Volkswagen's operating profit reached 1.01 billion euros in January to June after the company sold 2.3 million VW passenger vehicles worldwide. Audi, on the other hand, earned 2.67 billion euros from the sale of 750,000 cars.
The automaker's entry into China's luxury car market is scheduled to begin by the end of 2015. Though the pricing detail is undetermined yet, Volkswagen is looking to sell 50,000 vehicles as its yearly sales target.
