Volkswagen's Jetta will become its own brand later this year, but only in China. Intended as a budget brand for the world's largest automotive market, Jetta will take a place below Skoda, also heavily present in China, as the Volkswagen Automotive Group's entry-level make.
Volkswagen was one of the first global automakers to land in China, producing the Santana sedan (a Passat variant) there starting in 1983. Over the years, Volkswagen has worked to keep up with changing tastes, while offering a number of models unique to the Chinese market. Skoda joined VW in China as another budget brand about a decade ago, but the pressure of Chinese domestic automakers has forced VW to think about an entry level brand that could compete with even more affordable offerings.
"With the new Jetta Brand, Volkswagen intends to exploit its market potential in China even more effectively," the automaker said. "In many cities with millions of people outside the metropolitan regions such as Beijing or Shanghai, vehicle ownership levels are still very low, in some cases below 100 cars per 1,000 inhabitants. At the same time, members of a growing middle class are striving for individual mobility with the first car of their own. With the new Jetta brand, Volkswagen especially intends to target these young Chinese customers."
VW says that Jetta the brand will be closely tailored to the Chinese market, offering a clear design language, quality, safety and value. China's First Automotive Works, or FAW, will produce vehicles for this marque in a partnership with VW — FAW played an important early role in Volkswagen's launch in China — and a sedan and two SUVs will be the first models on sale, due in the third quarter of this year.
"With Jetta, we are closing the gap between the established VW lead brand in the top volume segment and entry-level mobility, which accounts for about one-third of the Chinese market and is served mainly by local brands," said Jürgen Stackmann, member of the Volkswagen brand board of management responsible for sales. "This way, we will significantly increase our market coverage."
Volkswagen's move to carve out a new brand can be seen as Wolfsburg's response to the growing dominance of Chinese domestic brands, as well as greater dilution of its market share with the debut of a greater number of European and American car brands. Two decades ago, Volkswagen held a commanding share of the market — that share has shrunk even as the market itself has grown dramatically. The Chinese domestic car market of 1999 may be as unrecognizable as the U.S. market half a century ago. And despite Volkswagen's best efforts it's a car buyer landscape that is still seeking out new tastes.
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