VW conquers long and winding road

PUBLISHED : Monday, 14 July, 2008, 12:00am
UPDATED : Monday, 14 July, 2008, 12:00am

Before there was Buick, Hyundai or Honda, there was Volkswagen. From around the late 1980s, the German car giant's Santanas were synonymous on the mainland to sedan, and even today a random sampling of five cars on Beijing roads will include at least two Volkswagen models.

Martin Posth, a former member of the Volkswagen and Audi executive management boards, played a large part in the brand's growth in China. In his first-hand account of the early years, 1,000 Days in Shanghai, Posth reveals what political, management and technical miracles were worked on all sides to 'motorise' China.

It all began in 1978 when China's then machine building minister took the train to Wolfsburg, Volkswagen's German headquarters, introduced himself to the duty officer and said he would like to talk to someone in charge. Sales director Werner Schmidt met him. Six years later, in October 1984, Volkswagen and three Chinese partners sealed a deal at the Great Hall of the People with Premier Zhao Ziyang and German Chancellor Helmut Kohl looking on.

A month after that, Posth, then a member of the Audi management board, was staring in shock at the derelict factory grounds in Anting, outside Shanghai, which was to be the foundation for the car project. It must have seemed one of the least likely places to realise the joint vision for an international-standard car assembly line, but step by step the German and Chinese workforce sought to overcome mistrust, apply 'scientific management' and build a plant all sides would be keen to call their own.

Along the way, there were many frustrations. 'Germans used to exerting authoritarian rule in a Nigerian setting, for instance, were not necessarily the right choice when it came to taking on management positions in China, which required some sensitivity and empathy,' Posth said. Then there was the multitude of external pressures mounting on the venture. Currency crises, the demands of central planners and the constant need to answer to Wolfsburg required adept maneuverings and creative responses.

One of the book's breakthrough moments comes midway through, when Posth realises that no one in the firm knows for sure whether their colleagues are dreaming the same dream. The solution was a mission statement to focus on a single direction. The second major revelation is in the way the Chinese and German executives harnessed the other's influence in the interests of the joint venture.

Posth ends each chapter with a checklist of points for managers and, two decades since the first 1,000 days of Shanghai Volkswagen, the principles remain the same. Whether it's building engines or promoting environmental awareness, the only sustainable joint-venture direction is pragmatism.