Published on May 27th, 2020 | by Daniel Sherman Fernandez0
Volkswagen China Brand’s ‘Jetta’ Name With Success
‘Jetta’ is the brand name of a range of vehicles sold just in China
Volkswagen (VW) has been offering cheap cars in China under the Jetta brand name since September last year. The name plate ‘Jetta’ has become a sub-brand under Volkswagen just for China as Chinese car buyers respect the ‘Jetta’ name and trust in its value.
The opposite sits with Malaysian car buyers and the ‘Jetta’ name in Malaysia is frowned about due to high reliability issues in the past and also fledging warranty and after sales connected with Jetta models sold in Malaysia. Still, Malaysian Jetta owners love their cars performance and its comfort.
Since 1979 VW has been producing the midsize sedan Jetta. VW built the ‘Jetta King’ just in China just for domestic sales between 1997 and 2010.
VW sales director Jürgen Stackmann speaks of an untapped market potential in China. So far, there would be 100 cars per 1,000 inhabitants in cities. A young, up-and-coming middle class is looking for cheap cars at entry-level prices of 10,000 to 20,000 euros, which so far have been offered almost exclusively by Chinese manufacturers. When buying the first car, the whole family puts money together and it is very important to the drivers to own a car. VW wants to get a decent slice of the big first-buyer cake.
One per cent market share achieved
The corona crisis is also spurring business because many people want to avoid the increased risk of infection in public transport and sharing taxis. With its affordable entry-level models, the brand is therefore becoming increasingly popular in China. ‘Jetta’ was able to deliver 13,500 vehicles in April this year, which corresponds to a market share of around one percent. Since its market launch in September 2019, around 81,000 vehicles have found their way into Chinese consumer homes.
The ‘Jetta’ range has been supplemented this March 2020 with a compact SUV model, the ‘Jetta VS7’.
Despite the corona-related slump in sales in the Chinese market of more than 30 per cent (January to April 2020), sales of the new VW brand only fell by 12 per cent in the same period which was measured in terms of sales from September to December 2019.
In addition to the VS7, the ‘Jetta’ model range consists of the compact SUV VS5 and the sedan VA3.
Production In China
The Jetta vehicles roll off the assembly line at VW’s longstanding joint venture partner FAW-Volkswagen in Chengdu. VW design chief Klaus Bischoff has designed an independent, ‘China Only’ unique appearance for the brand and the first Jetta models were launched in China in the third quarter of 2018 and the North American VW Jetta (pictured below), which is neither optically nor technically related, retains its model name.
PRESS RELEASE: With the new JETTA Brand, Volkswagen intends to exploit its market potential in China even more effectively. In many cities with millions of people outside the metropolitan regions such as Beijing or Shanghai, vehicle ownership levels are still very low, in some cases below 100 cars per 1,000 inhabitants.
At the same time, members of a growing middle class are striving for individual mobility with the first car of their own. With the new JETTA brand, Volkswagen especially intends to target these young Chinese customers. The JETTA model range, which is to be produced by FAW-Volkswagen in Chengdu, will include one sedan and two SUVs. Sales are scheduled to start in the third quarter of this year.
Jürgen Stackmann, Member of the Volkswagen brand Board of Management responsible for Sales, says: “With JETTA, we are closing the gap between the established VW lead brand in the top volume segment and entry-level mobility, which accounts for about one third of the Chinese market and is served mainly by local brands. This way, we will significantly increase our market coverage.”
JETTA is based on the key elements of the Volkswagen DNA: quality, safety, value and a clear design language. With the introduction of JETTA, the Volkswagen umbrella brand will be able to position itself even more clearly as “top of volume” with its vehicles and to further sharpen its profile. In addition, with this offering specially tailored to the needs of the Chinese market and developed together with FAW-Volkswagen, Volkswagen is forging ahead with the further regionalization of the market.
Stackmann: “In China, the Jetta plays an extremely valuable role for us as a Volkswagen model. It has brought mobility for the masses, just like the Beetle once did in Europe. Developed by Volkswagen and built in China, the Jetta China has placed China on four wheels. To this day, it is one of Volkswagen’s most popular models in China – a real icon. This is why we are transforming a model into a brand for the first time in the history of Volkswagen and establishing a separate model and brand family.”
New approaches are also to be adopted in sales. JETTA will establish its own network of dealerships and will approach customers directly with innovative sales formats – digital showrooms, shopping malls and mobile sales trucks. By year end, about 200 dealers are to offer the new brand.
In China, the Volkswagen brand delivered 3.11 million vehicles to customers last year (down 2.1 percent on the previous year). With a share of almost 50 percent in worldwide deliveries, China is therefore Volkswagen’s largest single market. In a market affected by an overall fall in sales (-4.6 percent compared with the previous year), Volkswagen was able to win market shares. In 2018, Volkswagen also delivered the 30 millionth Volkswagen to a Chinese customer. Since Volkswagen came to China more than 30 years ago, the brand has clearly asserted its number one position. China is not only the world’s largest automobile market but is also at the forefront of the greatest transformation ever experienced by the automotive industry. The country is the new powerhouse for e-mobility, digitalization, connectivity and autonomous driving.