VOLKSWAGEN Does Not Know Auto Market and Shall Refrom

China Auto Show Car Model

FAW VOLKSWAGEN does not Completely Know Auto and shall Endure Loneliness. FAW VOLKSWAGEN has stepped out of the concept of localism. China Auto industry has fallen behind in the overall industrial structure and cannot be designed for purpose.

Reporter: why this meeting was held in Shanghai? Is there any special purpose?

Edward Chen: Shanghai auto industry is strong. Are we here to give some stimulation? No. I think FAW VOLKSWAGEN has already stepped out of the concept of localism, and has always been Chinese one, and has never been that of the Northeast or of Changchun. Under the circumstance of WTO, we will be in the place where the market is the most prosperous, and we will seek our clients in the market. We will play the game fairly, and will win our clients’ favor through our confidence, good faith and our continuous improvement.

Reporter: you just said that those who are engaged in auto industry today should not be impetuous but should endure loneliness. Nowadays, it needs great courage to raise such an idea, because we are in an impetuous society where all enterprises pay much attention to design themselves. Why do you raise such an idea at the very time? How will you do? You must have lost a lot, haven’t you?

Edward Chen: Right. China Auto industry has fallen behind in the overall industrial structure and cannot be designed for purpose. I think the public and our consumers are clear about it. In order to change the behindhand situation of the whole system, we need to study. However, if such study is not well based, we are difficult to achieve a leaping progress. Therefore, I think the reputation of an enterprise cannot be formed if it only pursue the one-off media propaganda, and the enterprise cannot stand in the front if it only pursue the recommendation of one product or once recommendation. This is our experience in all these years’ operation. What is the base that auto industry needs? It’s the systematical capability, instead of the capability of manufacturing a product. We’ve manufactured many products. We can manufacture a complicated product or do once, but it would be impossible for us to manufacture 1,000, 10,000, or one million products. Such quantitative and the qualitative changes are challenge and trial to the systematical capability. We thought that we could do many other things if we could finish doing one thing, but in fact we were wrong. Why? Do you know how to shopping? Is that as easy as to shop in supermarkets? Auto purchasing is far more complicated so that it has an integrated theory and system. Do you know how to sell auto? We now sell auto just like herding cows. Is it selling? Of course not. The genuine market has its own culture, because the auto using is a process lasting for several years. The real operation comes not merely from the enterprise but from the whole course from product manufacturing to using, in other words, from how to help your consumers to use. Can we do all of these? Suddenly we realized that there were many things needed doing and studying from beginning. However, such study can’t be finished in one day. So now the problem lies in markets, including capital market and stock market. Many enterprises feel that such opportunity will never come again once it is lost. However, the real opportunity lies in how strong your base is. To be engaged in the auto industry, I think, one should be able to see the difference between such system and international competition and work hard. In order to have a position in international market and take part in it, one enterprise should do well in its fundamental work, including concepts, basic skills, quality training, and the training of our managers. Sometimes we feel that we are mangers in a reformation period and are not qualified in international managing, so we need to study, need to be trained. Therefore, I think it’s unrealistic to think that we meet the international standards, and internationalize our companies and lower the price of our products from one level to another in one night. I’m willing to endure loneliness and to train myself on the basic honestly. For my enterprise, this basic training may take 10 years, 20 years or even longer. One must love auto if he/she shall devote his life to the career, and also be able to bear the difficulties, hardships ahead, because our management, product foundation, marketing and consumer service are still vulnerable.

Reporter: When you devoted to some enterprise, you may encounter lots of misunderstands, and even the fabrication by the media, would you feel lost?

Edward Chen: In my opinion, company should concern more about customers, not only about fabrication. I expect our FAW VOLKSWAGEN to be based on this concept, and I think a true media that is insightful to the market will gradually quest for what is most needed during our market process and after the accession to WTO. At present WTO is a real challenge to us. To our companies, it’s hard to say whether WTO is good or not, why? Because it depends on our performance. If we performed well, we will gain a lot, and if we didn’t, we will lose some. So if we want gains, we have to work diligently. Since we employ this principle, I think we shouldn’t feel lost at all. Because gaining customers’ approve is one of our goals.

Reporter: Nowadays people always thought such bosses as you are making a good living: enjoying flight all day long, joining all kinds of parties, and living with great dignity.

Edward Chen: It’s easy to say. You know, Chinese auto industry got a long way to go. Currently the first thing ahead of us is avoid impetuosity and vanity, then start from the top to do something, meaning we should endure the hardship, and be in persistence. People always envy us as CEO, but in fact we are far from what they thought, because we have no foundation. Without that, we can’t handle things easily. When other bosses get down to business, they have everything prepared in most tech systems, but we, on the other, haven’t. It’s time to start from the top to pave the way. We should diligently do something. Apparently we live in the star hotel with high-level service, but we always feel nothing about. It’s true that I once attended a conference in Zhuhai, I didn’t know I was living by the sea until I pulled off the curtain just before the departure. Today the employees in the companies are still in hardship, and they are facing the international challenges. I think presently the most important thing for the state owned enterprises is the equity in the competition effort. Let me explain this: for example, those CEOs in most countries, whose working hours are about 12 to 16 hours, could proportionally allocate his time and efforts in marketing, management, strategies analyzing for the future, and sociality. But the efforts allocation of the managers in our state-owned enterprises is another case. I think we should think about it thoroughly, and deal with our business no matter it’s fair or not. However, it will take us lots of time, because while others are focusing on the market analyzing, we are dealing with those extra matters not supposed to be dealt with by us. It’s not fair, not right, and irresponsible. So we are different from many other enterprises, including nongovernmental companies. We FAW VOLKSWAGEN are not mature enough to be proud of our auto business, and we still need to work on it.