BEIJING -- Volkswagen Group China is changing its marketing strategy in an attempt to arrest a plunging market share. The company is targeting different groups of consumers for the vehicles it assembles at its two joint ventures in China.
"The focus will be in differentiating each joint venture's models," says Weiming Soh, vice president of sales and marketing for Volkswagen Group China. "We categorize Shanghai Volkswagen customers as classic elite, and FAW-Volkswagen customers as modern elite."
VW previously segmented the market along more traditional demographic lines, such as age and income. It placed vehicles in low-, middle- and high-end price groups.
But China's fast-changing market requires a different approach, Soh says. Volkswagen now divides Chinese consumers into 48 customer groups based on factors such as income and lifestyle.
"We are looking at the market from the perspective of who our customers are," Soh says. "One of the difficulties we have is that customer profiles develop so fast in China."
The new strategy applies to all Volkswagen Group brands assembled in China. FAW-VW assembles the Volkswagen-badged Jetta, Bora and Golf, as well as the Audi A4 and A6.
Shanghai Volkswagen assembles the Volkswagen-badged Santana, Santana 3000, Passat and Touran. In 2007, Shanghai Volkswagen will begin assembling the Skoda brand.