Volkswagen is one of the earliest entrants into the Chinese market and currently the largest foreign car manufacturer in China. Its entry and progress have been very successful and now it dominates thirty percent of the Chinese car market. This paper analyzes Volkswagen’s investment strategy in China and its mode of entry into China including the particular mode(s) used by the German car manufacturer and the underlying reason behind its entry choice(s). Volkswagen was one of the first multinationals who recognized the enormous potential of the Chinese market and the long-term opportunities that were available. At Best Essay Forum, we provide the best dissertation topics, MBA dissertations and case study on Volkswagen for our clients, which are 100% Plagiarism free as our professional writers write them. Dissertation topics, MBA dissertations and case study on Volkswagen are written by qualified degree holders of bachelors, Masters and PhD. They produce your academic assignments with much attention by fulfilling the requirements.
China is currently the most attractive investment destination for large investors, and nearly all car manufacturing companies from all over the world are making intensive to get their share of this very lucrative market because China is now the largest car market in the world. The market for cars in increasing by sixty percent annually and foreign and local manufacturers are competing aggressively to capture the largest share of the market. The major objective of Volkswagen’s investment in China was the aspiration to become the leading manufacturer and seller of cars which would get it a strategic position in the Asian market. Volkswagen hoped to reach its desired goal of creating a manufacturing plant for making and selling cars in Asia and for making components that could be used in Europe and other countries besides China.
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For their part, the Chinese put up their share of the capital, made land, labor, and manufacturing facilities and provided other necessary resources while Volkswagen designed the manufacturing technology, production, marketing, and management expertise. Chinese shareholders and Volkswagen both owned an interest 50% in this joint venture which was in accordance with Chinese policies of attracting Foreign Direct Investment from the international car market. The initial contract period was for 25 years, but on April 2, 2002, this period was extended for another 20 years. The manufacturing plant has been constructed outside Shanghai and currently six series of the five passenger cars which are Santana B2, the Passat, Polo, Gold, and Tourna.