China: the Second Home Market of the Volkswagen Group
Total Page:16
File Type:pdf, Size:1020Kb
China: The second home market of the Volkswagen Group Carsten Isensee Executive Vice President Finance, Volkswagen Group China HSBC Roadshow, Hongkong, 24-25 November 2014 Business overview and sales performance Market development Investments Volkswagen Group China Our products Emerging business fields and financial results 2 Volkswagen Group China (VGC) at a glance Volkswagen production facilities in China Facts 2014 Shanghai Volkswagen FAW-Volkswagen Volkswagen FAW Engine (Volkswagen, Audi) ■ Volkswagen Group ventured into China more than 30 years ago Volkswagen FAW Platform Changchun ■ Over 20 million cars delivered to Chinese Urumqi Dalian Volkswagen Automatic customers since market entry Beijing Transmission Dalian Volkswagen China ■ 89,000 employees work for the Volkswagen Investment Company Volkswagen FAW Engine Tianjin Group in China Volkswagen Automatic Yizheng Transmission Tianjin Chengdu Nanjing ■ Another 360,000 employees work within our Changzhou Shanghai Volkswagen dealer network FAW-Volkswagen Shanghai MAN Diesel & Turbo Ningbo Volkswagen Shanghai Volkswagen ■ Volkswagen Group China is represented by FAW Platform Foshan (Volkswagen, ŠKODA) more than 40 entities in China Shanghai Volkswagen ■ People are the center of Volkswagen Group Volkswagen Transmission Car production plants China’s strategy ‘Ren Wei Ben’. Component plants FAW-Volkswagen Headquarters Volkswagen Group China Shanghai Volkswagen Volkswagen FAW Platform Powertrain 3 Deliveries to customers Volkswagen Group in China (January – October 2014) Import FBU Locally produced (‘000 units) (‘000 units) Volkswagen Group: 184 FAW-VW 1,433 SVW 1,409 Ʃ 2,842 Total deliveries region China 3,0261) 1) incl. Hong Kong, excl. Scania, and Ducati. All figures shown are rounded. 4 Deliveries to customers by brand (January – October 2014) `000 units +14.1% January – October 2013 3,026 January – October 2014 3,000 2,652 +13.8% 2,500 2,296 With a solid sales performance year-to-date 2,018 2,000 all brands contributed to the strong growth of Volkswagen Group China 1,500 1,000 +16.1% +12.4% 464 500 399 +18.5% 199 224 30 36 0 1) incl. Hong Kong, excl. Scania, and Ducati. 5 Volkswagen Group – No. 1 in the Chinese passenger vehicle market Passenger vehicle market China (January - October 2014 y-t-d) Others (i.e. local Volkswagen Group Delta of brands) 21% Rank Brand/Group market share 30% (y-t-d) 1 Volkswagen Group + 0.3% 10% Comp.1 2 Competitor 1 - 0.3% 10% 3 Competitor 2 - 0.1% Comp.2 5% 4 Competitor 3 +/- 0.0% 5% Comp.3 5 Competitor 4 - 0.6% Comp.4 6 6 out of the Top 10 selling vehicles are Volkswagen brand models Deliveries to customers (January – October 2014) 1 Lavida 311,295 vehicles 5 Jetta 247,297 vehicles 2 Santana 266,138 vehicles 9 Tiguan 197,954 vehicles 4 Sagitar 250,184 vehicles 10 New Bora 192,076 vehicles Source: CPCA 7 Audi in China – Enhancing leadership in the premium segment Flexible capacity expansion, adjusted to market demand Leading the premium SUV market in China Annual production capacity, vehicles up to 700,000 SUV share of the premium market Comparison of growth rates SUV 40% +36% 400,000 18% 38% 35% +30% 200,000 30% 100,000 25% +22% Production Production 20% 82% 62% 20082010 2013 2017 15% Pioneering the compact segment 10% with three locally produced models 5% 0% 2008 Jan-Sep 2014 Jan-Sep 2014 Premium Market SUV Premium Market Audi SUV Audi Q3 Audi A3 Sedan Audi A3 Sportback • Segment leader • 1st local premium • 1st local premium • 50% market share compact sedan compact hatchback (Jan-Jul 2014) • launched early • launched in March September 2014 2014 8 China has become the most important sales market for ŠKODA Further volume expansion of ŠKODA Developing the model range in China within the next years Annual deliveries to > 500,000 Spaceback customers 226,971 Rapid Rapid 27,000 Yeti Yeti 2007 2013 2018 Superb Superb Superb Superb Superb Superb ŠKODA Top 5 markets 1991 vs. 2013 Octavia Octavia Octavia Octavia Octavia Octavia Octavia Octavia 1991 2013 Fabia Fabia Fabia Fabia Fabia Fabia Fabia Others Czech Republic China Others 2007 2008 2009 2010 2011 2012 2013 2014 38% 34% 37% 25% 15% Superb Superb 5% 9% 6% 6% 8% 7% 10% Germany Combi Combi Import Import Local Production UK Slovak Republic Czech Republic Current Models New Models Russia Poland Germany UK Yeti Yeti 9 Porsche is gaining substantial momentum in China Deliveries to customers (in units) Increasing model variety and improving customer experience CAGR +15% 37,425 31,205 2,603 24,340 1,149 1,418 949 6,738 SUV 2,402 Flagship 929 9,148 7,726 26,666 Macan launch in China: Q3 2014 Porsche Experience Center Shanghai 19,959 13,283 2011 2012 2013 Sports Car Cayenne Panamera 911 Boxster/Cayman Dealerships (number of dealers) Sports Car Initiative China CAGR +16% Focus 2014: . Pro-active sports car market development and 63 40 51 exploitation with 911 and Boxster/Cayman 2011 2012 2013 10 Business overview and sales performance Market development Investments Volkswagen Group China Our products Emerging business fields and financial results 11 China continues to offer substantial growth potential Real GDP growth in % 12 Bubble size: real GDP 2013 data unless otherwise stated 10 8 China China 2020 6 China 2030 4 Japan India 2 USA Brazil Russia 0 Germany -2 0 102030405060 Real GDP per capita in `000 USD PPP Source: IHS Economics 12 Continued positive economic development and the increase in household income drives private consumption on a solid growth path in USD bn % 7,000 9.0 Private Consumption, China (left scale) Private Consumption Growth Rate, China (right scale) 6,000 8.5 5,000 8.0 4,000 7.5 3,000 7.0 2,000 6.5 1,000 6.0 0 5.5 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: IHS Economics 13 Traffic restrictions reduce local deliveries, however, rumors on future restrictions lead to front loading of car sales Cities with either restriction policy in place or Deliveries in cities with or rumors on future restrictions without restrictions1) in ‘000 units Beijing (2011) +12.4% Growth Tianjin(2014) (y-o-y) 12,699 Dalian w/ Rumors 30.9% Shijiazhuang 11,297 Qingdao 3,111 (15 cities) Lanzhou 3,111 Nanjing Shanghai (1994) 2,3762,376 Restricted 2,376 -16.3% Xi’an Zhengzhou Suzhou 1,0421,042 (6 cities) Chongqing 1,2461,246 Chengdu Hangzhou (2014) Wuhan Ningbo Not Cities restricted Dongguan restricted 11.3% Cities with Shenzhen 7,675 8,5468,546 Foshan 7,675 (326 cities) restriction rumors Guangzhou (2012) Guiyang (2011) Remark: Restricted cities include Beijing, Shanghai, Guangzhou, Tianjin, Hangzhou, Guiyang; Jan - Sep 2013 Jan - Sep 2014 15 cities w/ rumors include Chengdu, Chongqing, Dalian, Dongguan, Foshan, Lanzhou, Nanjing, Ningbo, Qingdao, Shenzhen, Shijiazhuang, Suzhou, Wuhan, Xi’an, Zhengzhou 1) converted to deliveries to customers from registration data Source: Registration data, CPCA 14 Less developed cities provide new opportunities Level I cities Level II cities Share of total market Beijing Dalian Level I share Level II share Shanghai Xi´an Guangzhou Changsha 41% 37% … 35% 34% 119 95 33% ᴓ cars/1,000 inhabitants Number of cities 9 26 Level I II and cities Average # of 16.7 8.4 2014e 2015e 2016e 2017e 2018e inhabitants (m)ᴓ Level III share Level IV share Level III cities Level IV cities Level V cities Level V share 66% 67% Shantou Guyuan Haibei 65% Hengshui Yaan Jinchang 63% Jingdezhen Zigong Turpan 59% … … … 62 ᴓ cars/1,000 29 25 inhabitants Number of cities 68 109 135 Average # of 4.8 4.0 1.8 Level III, IV V and cities inhabitants (m) 2014e 2015e 2016e 2017e 2018e 15 China will invest further in the construction of road infrastructure Length of national roads in China (‘000 km) National Road Network Construction Plan National expressways National ordinary roads 265 Urgent need to expand the current road network: ■ more than 900 counties1) in China are not connected to the national road network +150% +84% ■ more than 18 cities with >200,000 population and 29 regional administrative centers are not connected 118 to expressways 106 64 The Central Government Plan: ■ By 2030, all cities above 200,000 inhabitants will be connected to the national expressway network, and all counties will be connected to the national ordinary 2011 2030 road network 1) Source: National Road Network Construction Plan (2013-2030) There are 2,856 counties in China 16 Southern and Western regions show above average growth supporting our Go South and Go West Strategy Regional share of total market sales (Q3 2013 vs. Q3 2014 in %) 22% 20% Heilongjiang Northern region Jilin Western region Q3 2013 Q3 2014 Xinjiang Liaoning Inner Mongolia 35% Beijing 35% 22% Tianjin 21% Hebei Eastern region Ningxia Shanxi Qinghai Shandong Gansu Q3 2013 Q3 2014 Q3 2013 Q3 2014 Jiangsu Shaanxi Henan Shanghai Tibet Hubei Anhui Sichuan Zhejiang Chongqing 23% 23% Guizhou Hunan Jiangxi Fujian Southern region Yunnan Guangxi Guangdong Q3 2013 Q3 2014 Hainan Source: Registration data 17 How big will the Chinese passenger vehicle market be in 2020? in m vehicles 38 Forecast 32 m 33 vehicles p.a. Scenario CAGR 10% 28 10% growth in 2014e: ≙ ~ 17.5 m vehicles 23 2013: 25 m 15.9 m vehicles Scenario vehicles p.a. 18 CAGR 5% 13 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Volkswagen Group China scenario calculation 18 Business overview and sales performance Market development Investments Volkswagen Group China Our products Emerging business fields and financial results 19 Investment program and core projects Total investment of €18.2 bn1) in 2014 - 2018 Scenario CAGR 5%: >20 m passenger vehicles Vehicle Component