Exorbitant prices have in no way dampened car purchasing fever.

At the start of the 1980s when the Chinese automobile industry was still weak, more than 300,000 cars were imported. China needed to produce its own automobiles, and Volkswagen was one of the earliest overseas automobile companies to be considered, having initiated investment and technology negotiations in 1978. "Volkswagen had been looking for Asian business partners so as to compete with America and Japan, and was aware of China's huge market potential," says Qiu Ke, former general manager of the Shanghai Automobile and Tractor Industrial Company. There were concurrent business negotiations with Japanese and American companies, but China chose Volkswagen. The reason? Its models best suit Chinese motorists' needs.

Volkswagen thus became the first overseas automobile company to enter the Chinese market. In 1985, the Sino-German joint venture Shanghai Volkswagen was established in Shanghai with Santana as its main product. The only foreign car available at that time, it soon dominated the Chinese automobile market, and in the mid to late 1980s, Santana accounted for 80 to 90 percent of cars on Chinese roads.

In 1991, Volkswagen established FAW-Volkswagen in Changchun, Jilin Province. This, its second joint venture in China, began production of cars like the Audi that were intended specifically for business. Volkswagen has since become one of the best-known transnational companies in China.

Popularizing the Volkswagen Brand

Volkswagen made a splash at the Sixth Beijing International Automobile Exhibition when it put the Chinese-made Santana, Jetta, Audi, and Passat together with the German-made Golf under the VOLKSWAGEN sign, rather than in different sections as in previous exhibitions. The names of these models are widely known in China, but not everyone realizes they are Volkswagens. As automobile companies like Toyota and GM increasingly enter the Chinese market, more car brands emerge.

"Our products are successful on the Chinese market," says Dr. Robert Buchelhofer, chairman of the board of directors of Volkswagen Asia Pacific. "But we need to embolden our brand name." This is why Volkswagen decided to popularize the VOLKSWAGEN brand and give Volkswagen (China) Investment Company the responsibility of making sure Chinese consumers know that Santana, Jetta, Audi, Passat are all by Volkswagen.

More Imports

China's WTO access and the 2008 Beijing Olympics have brought still more business opportunities to the automobile industry. Many companies export to China, and Chinese consumers are irresistibly attracted to imported cars. Says Walter Hanek, general manager of the Import Office of Volkswagen Group, "It is no longer sufficient merely to manufacture cars in China. Chinese customers are increasingly discerning, so we must import more of our models into the Chinese market."

The Sharan is the first imported Volkswagen model now available in China. It is the first of many top Volkwagen models soon to be introduced.