After the emissions scandal which shook the automotive world in September 2015, Volkswagen have been hit by falling share prices, poor sales and huge bills as a result of the scandal. So, how is Volkswagen planning to counter the fallout of the scandal and start making profits again?
Well Volkswagens plan is to invest in China it seems. At this moment in time, VW’s sales fell in China by 3.4 percent to 3.5 million cars. But with the scandal, this must be seen as a good point as their sales have been affected much more negatively in other countries across the world. So, VW aren’t doing as badly as they could have expected in China. It must also be noted that of the 11 million vehicles that have been affected by the scandal, only 2000 vehicles carry the emissions cheating software. Again, China seems to be a safe zone for VW at this moment in time. But, it must also be mentioned that according to the Chinese Automobile Makers Association (CAMA), Volkswagen did lose its title as leaders in the Chinese automobile world to General Motors. The investment however will hopefully reverse that role.
So the Chinese market seems safe for Volkswagen at this moment considering sales haven’t been radically affected and the cars that may need a recall, because of the emissions, are very low too. VW are therefore investing 4 billion Euros (£3.1 billion) into the Chinese automotive market. There are very little SUV’s produced and sold compared to their demand and Volkswagen is going to use this information to turn a profit. So, Audi, Skoda and Volkswagen SUV’s will be rolled out in there thousands all across China.
Within the Volkswagen group however, Skoda seem to be the company that wants, or may need the most investment. Eyeing up a 2 billion euro investment from VW, the Czech company plan to double the deliveries they have made in China by 2020 after a record 281,700 were delivered in 2015. This also comes to the company after a record 1,055,550 cars were produced in 2015.
The investment goes further than this as there are also rumours that Volkswagen are also planning to work in partnership with Chinese laboratories and companies in order to research and test future concepts.
Let’s just hope that this investment does help Volkswagen in their climb back from the depths of the emissions scandal affair…