Choi’s experience in launching new models may be one of the reasons SVW sought him out. During his 12 years at GM, he helped launch the Buick into China and relaunch the Chevrolet under SGM, before heading up the sales and marketing department for SGM’s import division. He says that the ethics of the two companies makes his approach subtly different. GM, he says, was more obsessed with process, while VW focuses on product. “GM has many products which compete each other, so it has to have a strong discipline to closely monitor efficiencies,” he says. “It is more focused on traditional marketing — advertising, communications, positioning.”
SVW is willing to explore the ‘new frontier’ with new marketing strategies, including digital media, he says. He cites the fact that SVW’s willingness to appoint him from outside the organisation, in an industry where many are promoted from within, as evidence of this. His experience in dealing with a variety of competing brands will be crucial when dealing with Volkswagen’s other joint-venture, First Automobile Works Volkswagen in the North, as well as the import arm. SWV’s Northern counterpart produces the Jetta, Bora, Golf, Caddy and Sagitar models, which can compete directly with SVW’s Santana, Passat, Polo, Gol and Touran. Choi accepts that there is competition between the two, but says “it’s much better than other competitors, because you can talk to each other”.
Although there are synergies between the two JVs, it seems unlikely that they will converge any time soon for reasons of politics. Both have links to the local Governments. There are also questions over whether this complex structure harms VW’s corporate image as a whole. Choi believes that VW bought its Olympic sponsorship, which is rumoured to have cost over US$100 million, to consolidate a stronger overall corporate image in China. R3’s Olympic survey shows that consumers are associating Volkswagen’s corporate values with the Olympics, but it still lags behind other brands in terms of Olympics awareness.
Choi says he wants VW to use its association in a different way to other sponsors — focusing on the China market, rather than for worldwide exposure. “SVW has a 23-year history in China. We would like to tie in a lot of the national excitement around the Olympics with our product. We want to use it to create a stronger emotional bond with consumers,” he says.
Choi says much of this is being done online, contending that media strategy must lead the brand and not vice-versa. SVW uses a lot of outdoor for exposure but, increasingly, this is being followed up with online and mobile CRM.
A campaign for Touran, which is little known in China, launched last year, linking owners with online discussion groups, blogs and events. Choi says one of his main aims with CRM is to “make sure the customer spends, make sure they come back for services and buy other things”. For this, VW launched a co-branded credit card with Visa last October.
VW faces a fight in lower-tier markets with their traditionally higher-end products competing with lower-priced local competitors such as SAIC Chery. Already, around 40 per cent of SVW’s sales are from lower-tier locations, according to Choi, who says that the company is already positioned ahead of its competitors in these markets.
“Many companies use more expensive models to fund lower-end products and build a customer base,” he says. “We did that before and now we have to bring out a lot of new products for people to upgrade. We’re on a different cycle to some of the others.”
Choi is confident that Volkswagen’s experience in R&D gives it an advantage over its local competitors. “Having the financial strength, experience and skill set to be able to forecast and anticipatewhat will be selling in five years is very important.”
Amid the optimism, though, Choi sounds a note of caution, warning that the influx of talent into the market gives SVW’s edge a limited life.
Raymond Choi’s CV
2006 Director, marketing division, Shanghai Volkswagen
2004 Director of vehicle sales, service and marketing, import division, General Motors
2003 Brand director, Chevrolet China
2000 Brand director, Asia-Pacific, Chevrolet and Opel
1996 Brand manager, Buick China
