"Enormous potential in the entry-level segment"

Mr. Stackmann, last spring Volkswagen presented JETTA, the new brand for the Chinese market. Deliveries began in September. How did the start go?

We are very satisfied; JETTA has made a strong start. With almost 30,000 vehicles delivered, JETTA had the most successful first three months of any new car brand in China. And the incoming orders are good. We are looking forward to 2020!

In what other dimensions does Volkswagen operate in China?

Around 23 million passenger cars were sold in China during 2018, one and a half times the total of all European markets combined. The Volkswagen brand delivered around 3.11 million vehicles to customers in China in 2018. The country has developed rapidly in recent decades and is Volkswagen’s largest single market, accounting for almost 50 percent of our worldwide deliveries. In 2019, Volkswagen even increased its market share in a declining overall market, demonstrating the strength of the brand. China is our second home.

Which products did JETTA enter the market with?

The JETTA brand launched with a sedan and two SUVs. The brand presence is young and fresh. A distinctive and memorable logo, a dynamic color scheme and a specially created visual language give the brand its unmistakable character, matching the lifestyles of our JETTA customers.

JETTA is the first Volkswagen brand ever to have its origins in a model. What do Chinese people associate with the Jetta?

Many people all over the world know the name Jetta - be it in Europe or in America, where the Volkswagen Jetta in its respective regional version has celebrated or is still celebrating great successes. For almost 30 years, the Jetta in China has stood for Volkswagen's very own values: quality, reliability and safety. Developed by Volkswagen and built in China, the Chinese Jetta looks back on a proud past: it has brought mobility to the masses, just as the Beetle once did in Europe. And it has earned a level of consumer confidence that is second to none. We are now carrying this proud past into the future. If a vehicle model in China has the strength to become its own brand, it is the Jetta.

What strategy is behind JETTA?

A total of one third of all passenger cars in China are currently sold in the entry-level segment. Within this segment, around 80 percent of the vehicles go to customers who buy a car for the first time in their lives. So far, the entry-level segment has been served almost exclusively by Chinese brands. We see enormous potential there, and JETTA's lightning start proves us right. SUVs are becoming increasingly popular in China. This is also reflected in the market data: While sedans continue to sell well, the SUV segment is experiencing enormous growth momentum and now accounts for almost 50 percent of the total market.

Which customer groups should JETTA appeal to?

First-time buyers in China are on average about 20 years younger than those in Europe or the US and are much more connected to the digital world. Customers in China have a significantly lower monthly income and purchase cars with an average price of around 20,000 euros – up to 10,000 euros less than Europeans and Americans spend. We are reacting to this.

What is the connection between Volkswagen and JETTA?

Over the past decades, Volkswagen has successfully and consistently established itself at the upper end of the volume segment in China. With its “Made in Germany” DNA, the brand is known for excellent design, outstanding engineering, quality and safety. And this is where our new brand for China comes into play – designed and technically developed by Volkswagen in Germany, in close cooperation with our Chinese JV partner FAW-Volkswagen, who has been a reliable partner at our side for around three decades now. The JETTA brand closes the gap between the entry-level segment and the high-volume segment.

How is JETTA positioned in terms of price?

While JETTA provides affordable access to individual mobility, the Volkswagen roof brand can further sharpen its own profile as a "top-of-volume". I would stress that JETTA, with its high quality, safety, emotion, stable value and fresh design, is not a budget or economy brand. In view of these distinctive characteristics, we are deliberately positioning the new brand above the entry-level prices of around 5,000 – 6,000 euros on average that are customary in China.

How do you structure sales in China?

JETTA’s complete brand experience will stand out from that of Volkswagen. In the market, JETTA will be positioned independently. Just as young customers are fully networked in their everyday lives whilst on the move in the digital world, the entire customer journey is oriented accordingly. The sales process is almost completely digital. JETTA is setting up its own dealer network with modern digitalized showrooms, either as a ‘shop-in-shop’ with existing Volkswagen dealers or as a ‘stand-alone’ concept. JETTA also approaches its customers directly: for example, in shopping malls or with mobile sales trucks. By the end of the year, the number of dealers will have risen to around 200. Our Chinese joint venture partner FAW-Volkswagen set up the dealer network in record time, established new digital sales processes and gave the brand a face. In vehicle service, we make maximum use of our strength and synergies with our excellent Volkswagen brand service network. We are thus giving our youngest brand an invaluable market advantage – it’s called "Jetta by Volkswagen" for a reason.