VW will not shrink away from DSG technology in China

In the past five years, Volkswagen has become a leading brand in China. With cutting edge technology and high quality, the manufacturer has made considerable gains in the country. However, beginning last year VW has faced allegations from Chinese consumers that its DSG gearbox technology is unreliable and inefficient.

Being its largest market worldwide, VW will have take Chinese considerations into mind if it hopes to realize its Strategy 2018 goal of becoming the world's largest manufacturer. At last week's International Geneva Motor Show, VW Board of Management Member Ulrich Hackenberg (pictured), who is responsible for the manufacturer's so-called 'Development' segment, participated in an interview with Economic Observer News to answer questions concerning the DSG gearboxes and other topics. An excerpt of the interview follows:

Economic Observer News: "VW will complete its plan to invest 14 billion euros ($18.37b) with its Chinese partners by 2016. What will these investments be used for?"

Dr. Hackenberg: "The majority of investments will be used to build new factories. VW has already decided to build factories in Yizheng (Jiangsu), Foshan (Guangdong) and Ningbo (Zhejiang). We not only are aiming at building automobile factories, but also want to move production of engines, auto parts and other core technologies to China. In addition to these, we will begin other investment projects."

Economic Observer News: "Does VW have plans to cooperate with Shanghai VW on research and development of new energy vehicle technology?"

Dr. Hackenberg: "Regarding cooperating on electric vehicle research and development, we have already reached a consensus. The details are still being discussed. However, on the issue of research and development for localizing electric vehicles, VW has its own demands. For example, the engine framework must come from Europe, [while] other auxiliary parts, such as battery packs, may come from domestic suppliers."

Economic Observer News: "Which is more mature, VW's electric vehicle technology or those of Japanese manufacturers?"

Dr. Hackenberg: "In this aspect, VW is increasingly catching up with Japan. Honestly, Japanese enterprises' battery suppliers are technology superior to Germany's. [For] the E-Golf, [which] VW will begin producing in Europe next year, the battery supplier chosen was Japan's Sanyo. This year, we have already begun releasing hybrid versions of the Jetta and Touareg. In the future, VW will bring out plug-in style hybrid models in the US and China."

Economic Observer News: "VW was the first manufacturer to popularize DSG gearboxes in China. However, from last year some Chinese owners have begun to worry about their reliability. Will this affect VW's resolution to continue using DSG technology in China?"

Dr. Hackenberg: "VW will not change its strategic plan for DSG technology. We have already found a method to resolve the problem from its origin, and are working hard to satisfy the demands of Chinese customers. With those unsatisfied owners, we are actively pursuing communication. Fixing these problems is not hard at all."