Asean renaissance fuels Volkswagen's expansion
With a population of about 600 million and a rising middle class fuelling an increasing need for mobility, the outlook for Asean's automotive industry looks promising. Competitive labour costs, sound investment policies and the wide availability of vehicle component manufacturers supported by the upcoming Asean Economic Community make the region a favourable destination for car manufacturers. Leveraging its success and experience in China, Volkswagen Group has ambitious plans to strengthen its presence, dealerships and offerings in Asean.
With a population of about 600 million and a rising middle class fuelling an increasing need for mobility, the outlook for Asean's automotive industry looks promising. Competitive labour costs, sound investment policies and the wide availability of vehicle component manufacturers supported by the upcoming Asean Economic Community make the region a favourable destination for car manufacturers. Leveraging its success and experience in China, Volkswagen Group has ambitious plans to strengthen its presence, dealerships and offerings in Asean.
"Volkswagen's DNA is technology, durability and quality - we have up-to-date, sleek, character designs with a personality that fits into the purchase behaviour of this market," says Weiming Soh, executive vice-president of Volkswagen and president for its commercial operations in Greater China and Asean. "With our strong base in China, we see opportunities to further penetrate the region. Asean's growing demographic of young people in their 20s today means that they will soon be the consumers of tomorrow."
Asean is a varied market in transition. Soh believes close dialogue with government on mobility requirements ensures Volkswagen's portfolio can fulfil the evolving needs of each country. Nearly all Volkswagen models are offered in Asean through dealerships, with each market empowered to customise its own product portfolio and marketing campaigns accordingly.
"At Volkswagen, we do not only provide cars, but are socially responsible in advising countries, markets and leaders on mobility in relation to social development," Soh says. "The difference between Volkswagen and our competitors is that we create a landscape with the product lines we have - which means that we take 'das Auto' [the car], to every segment of consumers."
Asean experienced its first wave of purchasing power for automobiles in the 1960s. With the younger generation igniting a second wave of consumer spending, Soh believes that it is the right time for Volkswagen to be in the region. The carmaker's resurgence in Asean involves strengthening its presence in Malaysia, Macau, Vietnam, Myanmar and Brunei, where it has achieved a double-digit share in the country's automotive market. Critical to Volkswagen's expansion is its strategic presence in Hong Kong and Singapore - Asia's aspirational lifestyle capitals and vital trend-setting markets - where Volkswagen was brought in and became the only automobile brand run by original equipment manufacturers.
As part of its commitment to the region's expanding automotive landscape, Volkswagen has optimised its dealer network in Asean while ensuring sufficient capacity for growth in the coming years. This year, the brand will be launching its GTE Golf New Energy Vehicle in Hong Kong and Singapore. Region-wide, the carmaker reinforces its commitment to promoting fuel efficiency with the release of three new models that feature its latest turbocharged stratified injection and turbocharged direct injection clean diesel technology engines.
The Passat B8, Volkswagen's eighth-generation Passat model and winner of the 2015 European Car of the Year, features best-in-class fuel consumption and the largest boot capacity. The Golf Sportsvan, an upgrade from Volkswagen's Golf Mk 7 family model, is recognised for its excellent safety features, flexibility and practicality with its movable rear seats, great interior and spacious trunk. Asian buyers are also expected to love the sixth-generation Jetta GP, a sporty yet elegantly designed model with a spacious and classy interior.
With Asean, including Taiwan, having a target market size of four million cars by 2020, Volkswagen aims to strengthen its presence in the region.
"We have a vision, and we need to start off small and steady," Soh says. "I am excited about the opportunities in the region, where we envision becoming the next vehicle of choice for the increasingly modern and mobile consumers."
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