Competitive Pricing Helps Volkswagen Lead Compact Car Segment In China

Competitive pricing has contributed to Volkswagen’s reign over the compact car segment in China, according to a new report from Business Insider. The success has allowed Germany’s 21 percent share of the passenger car market in China at the end of 2013 rise to 24 percent through to July of this year.

VW is only 6 percentage points down from China’s 25 local brands combined in passenger car market share thanks to high compact car sales. The automaker sold 667,688 New Lavida, New Santana and Sagitar compact models in China in the first seven months of 2014, compared to the 147,651 examples of the three top-selling local models sold during the same time period.

Compact cars are crucial to a brand’s success in China, as compact car sales make up nearly 60 percent of the entire passenger car market there. VW has sustained strong compact car sales by matching Chiense automaker’s prices and having a reputation in the country for quality and reliability.

VW launched its New Santana compact sedan last year at an extremely competitive starting price of 84,900 yuan ($13,824 USD). Sales of the car doubled from January through to July and will likely remain stronger than the compact models from domestic Chinese brands going forward.

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