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 SVW Introduction
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Located in Anting International Auto City on the northwest outskirts of Shanghai, Shanghai Volkswagen Automotive Co., Ltd. (SVW) occupies a total area of 3,330,000 m2, with a floor space of 900,000 m2. SVW has now become one of the largest car-making bases in China with an annual production capacity of 500,000 units. Currently, SVW is making cars of two brands, i.e. the VW brand and the Skoda brand, including Santana B2, Santana 3000, Passat, POLO, Touran and Octavia Mingrui.

Growing Business

Established in March 1985, SVW is the first car-making joint venture after China began its reform and opened to the outside world. The investment ratios of the German and the Chinese shareholders are: SAIC Motor Corporation Ltd. owns 50% of the interest, Volkswagen Group owns 40% and Volkswagen (China) Investment Co., Ltd. owns the other 10%. The term of the joint venture contract is 45 years till 2030.

The birth of SVW put an end to China's history of making cars behind closed doors at a low technical level. SVW blazed a path of utilizing foreign capital and introducing overseas technology for an accelerated development of the Chinese car-making industry. In the past 20 years, SVW kept accumulating capital on its own and expanding the business without a stop, setting a new mode of development for the Chinese car-making industry. With many capital increases over time, the registered capital of SVW has reached RMB 10.6 billion Yuan from the initial RMB160 million Yuan in 1985.

SVW's success has greatly promoted the growth of the Chinese car-making industry. While expanding its production scale, SVW started the Santana localization endeavor to revitalize the Chinese parts supply industry. This grand trans-regional, inter-departmental, cross-industry and systematic project has helped a large number of local parts suppliers achieve their technical advancement, thus laying a solid foundation for manufacturing parts and components up to the international standard. Now over 400 domestic suppliers are able to supply SVW with locally made parts. SVW-accepted parts makers are now accepted by other carmakers as their parts suppliers, and some of them have become suppliers for global sourcing manufacturers.

In the transnational, cross-cultural, cross-century and cross-technology background, SVW's German and Chinese partners cooperate in good faith and in a pioneering spirit, and the company was commended as "an example of successful Sino-German cooperation". SVW has been given the title of Top Ten Joint Venture in China and led the list of The Biggest 500 Foreign-invested Enterprises in China for eight consecutive years, and it has been awarded the honor of National Quality and Profit-making Company for nine years in succession. .In the coure of its development, SVW has set quite a number of records in the Chinese passenger vehicle industry.

By the end of September 2007, SVW had turned out 3.8 million cars in all, becoming a carmaker that has the biggest population of cars in China.

Strong Capability for Independent Vehicle Development

SVW keeps to its product strategy of independent development along with assimilation of new technology to lift its product development capability. In the 2005 appraisal of technical centers of enterprises in Shanghai, SVW's technical center was rated first in the automobile industry.

From introduction, assimilation and absorption of overseas technology to the joint product development, SVW has now entered the period of building up its independent vehicle development capability. Through the TTA Training Program and project cooperation, SVW has built up an efficient product development team composed of employees of high qualifications. In the meantime, SVW has made an investment of RMB 2.0 billion Yuan in building up a large-scale technical center equipped with advanced facilities capable of meeting the needs of body styling, parts designing, analytical analogue, prototype-making, testing, etc. Advance testing facilities, such as the magnetic compatability lab, the climatic analogue lab, the auto acoustic lab, the vehicle impact test system, the engine durability test stand, especially the only-one-in-China automobile proving ground that incorporates various road types, provide reliable guarantee for the development, test and appraisal of new models. Now the company has established a complete process for product development, which includes market survey, product planning, styling, packaging, analogue computing, structure designing, prototype-making and testing, and has been capable of independent vehicle development with regard to independent bodywork development and development for adaptation of engines, chassis, electronic and electric components.?

In March 2004, Santana 3000, a car that SVW developed on its own, was launched on the market. SVW-made PASSAT LINGYU has consistently kept a good sales performance since its launch in November 2005. As two localized products in phase with German development launched in 2006, POLO Jinqing and Jinqu demonstrated SVW’s overall capacity in car design and power train development. NEEZA, the concept car developed by SVW that combines features of traditional Chinese culture with the latest international car design language, demonstrates SVW’s strong confidence in future market competitions.

On July 18, 2007, Volkswagen AG and SVW signed a joint declaration of cooperative development for a new car model. As the declaration expresses, the two parties will jointly develop a new car based on a new generation Volkswagen B-Class platform for the American and Chinese markets. SVW’s R&D work is being integrated step-by-step in the global development network of Volkswagen.

    

Advanced Facilities

With the completion of three technical transformation projects, now SVW has the capacity for carrying out production in four major production areas, i.e. Car Plant 1, Car Plant 2, Car Plant 3 and Engine Plant, plus a technical center.

The company boasts a lot of world-class manufacturing facilities and techniques, i.e. the fully automatic press lines plus two 2000T closed multi-work-bay press machines, which are the only two in China, as well as so many manipulators, to ensure manufacturing precision; a good number of welding robots and modern welding technologies that ensure the rigidity and precision of car bodies; two-face galvanized sheet metal and modern waxing technique, plus advanced car painting technique and automatic painting and spraying equipments that lengthen the anti-corrosion period of the car; the precise water grinding technique, the automatic production lines and the assembly line cold test technique that guarantee excellent performance of engines; and the modular assembly line and online laser inspection equipment that ensure a stable high quality of products.

SVW keeps paying close attention to the development of the global automobile industry and upgrading its techniques accordingly, in order to maintain its lead in terms of car model, manufacturing techniques and testing facilities.

Strict Quality Management

Quality is the life of SVW. The deep-rooted quality awareness and strict management system have enabled SVW to win long-term trust of the customers.As a Sino-German joint venture, SVW carries forward the VW spirit of being strict with product quality and making constant improvement and incorporates the masterly manufacturing techniques into the blood essence of the company. The company has worked out a complete quality assurance and inspection system, and puts every link of production under meticulous control. The Quality Control Center of SVW boasts the biggest and the most advanced labs in China for comprehensive matching tests, where inspection measurements are taken in a modernized and digitalized way. The Quality Control Lab is installed with world-level equipment for testing metal, non-metal and electric parts.

In 1995, SVW became the first carmaker in China to obtain the ISO 9001 Quality System Accreditation. In 2001, SVW passed in succession the VDA6.1 (Quality standard for Germany's car-making industry) and the ISO 9001 accreditation (2000 Edition). In the same year, In 2003, SVW was granted the awards of "Star Team of National User Satisfying Service" and "Model Unit for the Implementation of Shanghai User Satisfaction Project". SVW also got the "Golden Quality Award of Shanghai" in 2004. As the first and only one case in the Chinese car-making industry in 2001, SVW received the "National Quality Management Award" on the strength of its remarkable achievements in quality, economy and other aspects, and later successfully passed the award reconfirmation in 2007.

Product lineup

In order to meet diversified market requirements, SVW now produces cars covering both economy and medium-to-high-end market segments, which are based on the VW and the Skoda brands. The VW brand includes products of Santana B2, Santana 3000, PASSAT LINGY, POLO Jinqing and POLO Jinqu, Touran, and the Skoda brand includes the first model Octavia, and two later models Fabia and Superb, which will be localized pretty soon.

Santana B2 Since the introduction of Santana B2 in 1984, SVW has made hundreds of technological improvements to upgrade its technological contents, and has kept a good sales performance all along, for which Santana B2 is reputed as the "Evergreen Car" in China. The newly launched '07 version Santana B2 is fitted with E-GAS, EBD, aluminum alloy wheel hubs, electrical rearview mirror, remote door control, radio/CD/MP3 multi-media player, etc, better catering for the private users.

Passat SVW Passat was put into production in December 1999, and has become a classic product in the mid-and-high-end market segment soon afterwards.

PASSAT LINGYU, which was launched in November 2005, has been upgraded in contour, interior and drivability to meet the requirements of the Chinese customers without losing its original quality. The car has kept its place among the top three in the mid-and-high-end market segment ever since its market launch.

POLO In April, 2002, SVW-made POLO was launched on the Chinese market. With the introduction of this latest model of compact cars in the world, SVW successfully carried out the planning, manufacturing and launching of POLO in synchrony with other overseas manufacturers. In June, 2006, two new POLO versions--POLO Jinqing (Dynamic Passion) and POLO Jinqu (Dynamic Aspiration) were launched on the market. As two localized products in phase with German development, the two cars became strong competitors in the A0 market typical of trendy compact cars.

Santana 3000 Santana 3000, was launched on the market in March 2004. As a successor model to replace Santana 2000, Santana 3000 has an improved air-conditioning, easier electrical controls and better riding comfort. In June 2006, the 2.0L version of Santana 3000 was put to the market, which was upgraded in trimming and equipment, such as the chestnut-colored instrumental panel, leather-coated steering wheel, wood-grained gearshift lever, ultrasonic parking distance control, etc.

Touran SVW Touran was put to the market in November 2004. It incorporates into itself both the comfort and safety of sedans and the multi-functions of MPV. As the first MPS of its kind in China, Touran is really a perfect product to serve family, commercial and pastime purposes. With "A wise choice for life" as the slogan, Touran kept a surging sales volume thanks to its favorable market feedback, ranking itself among leading multi-purposes vehicles on the market.

Octavia Mingrui SVW-made Skoda Octavia Mingrui hit the market on June 6, 2007. The model adopts the state-of-the-art technologies, such as the world advanced TSI engine, the Tiptronic 6-speed transmission, the VW PQ 35 platform and laser welding. In this way Octavia Mingrui is not only superior to its competitors in technology, performance and quality, but is also the first localized car of its class that surpasses the original model of synchronous production in the real sense.

Worry-free Service

SVW provides services throughout the life cycle of its products. Based on the positioning strategy of brand differentiation, SVW has set up two sales and service networks for the VW and the Skoda brands, providing individualized services for the customers.

SVW now has over 600 4-S dealers and authorized stations in the whole country. Its sales and service networks extend from the southernmost Sanya to the northernmost Mohe, and from Jiamusi in the east and to Kashgar in the west, being the most extensive passenger car after service networks in China with the greatest number of member units. In October 2005, SVW created an all-new brand service entitled "Techcare", which not only comprises functions of marketing, service, vehicle financing, used-car replacement, accessories and car owner club, but also incorporates the vehicle purchase, upkeep, replacement and decoration into the whole service chain, which was well received by the users. In 2006, SVW was granted a number of awards, such as the “Top 10 Service Brand in China” award, the title of “5-Star Customer Service Center”, the “Annual Golden Spanner” excellent service brand technical contribution award, etc.

Following the guideline of “Service First”, SVW started to set up the Skoda delaer network in March 2006. Via strict examination and selection, SVW has so far signed contracts with over 80 dealers covering most part of the country. As a brand of high user satisfaction, the Skoda brand has been rated among the best on the JD Power lists of European countries for many consecutive years, and its after-sales service brand, “Human Touch”, is one of the most famous auto service brands in Europe. SVW has set up the Skoda service network in strict accordance with the brand’s international standard and in consideration of Chinese customers’ requirements, by which SVW offers individualized service programs with more human care.

Strategic HR resources

Talented people are the foundation of a company’s long-term development, and human recourses are a strong backup for the company’s stable growth. SVW attaches great importance to employee development and has established comprehensive systems in cultivating, appraising and motivating the employees. SVW designed pluralistic development opportunities for experts, technicians, managers as well as professionals and managerial staff in reserve, which helped fostering a talent team composed of high-level managers and professional staff.

In the recent years, SVW has intensified its human resources of core talents, nurturing over 300 experts, specialized and high-level technicians. Besides, the company has worked out new ways to foster and develop talents, such as the University Student Pool, Intern Program, Extramural On-the-job Training, Talents Appraisal Center, etc. Among these, the project of University Student Pool is created to help university students come into contact with the company prior to their graduation, and the practice of “getting to know each other in the process for a two-way selection” can be realized by involving the students in the activities of various functional departments.

Corporate culture of excellence

Corporate culture ensures a sustainable growth of the company. While making operational changes and reforms, SVW revised and refined its corporate culture at an appropriate time with a view to carrying forward the traditional and creating an innovative one, which was defined as “Be excellent and always strive for the first”. SVW’s corporate culture of excellence originates from historical accumulation and practical endeavor, as well as the pursuit of future prospect.

As one of the first car-making joint ventures in China, SVW successfully explored and created the development mode of utilizing foreign capital, introducing overseas technology and making constant expansion on its own. While expanding itself, SVW boosted the advancement of a great number of correlated industries. With unremitting exploration and pioneering, SVW scored outstanding achievements, thus engraving “excellence” in the development history of the company. Confronted with increasingly fierce market competition, ,SVW carried forward the fine traditions on the one hand, and one the other hand continuously gave challenges to itself, threw off various untimely restrictions, made brave innovations, engaged in fearless competition against rivals and kept pace with the times. In this way SVW forged ahead nonstop, made numerous breakthroughs and acquired everlasting vitality amid hot market competition.

SVW's core value of "Being excellent and striving for the best" coincides with the Olympic spirit of "higher, faster and stronger". As a member company of Volkswagen Group, which in June 2004 became the official automobile partner of the 2008 Beijing Olympic Games, While offering full support to the 2008 Beijing Olympiad, SVW is poised to pass on the Olympic ideology of "Green Olympics, High-tech Olympics and People's Olympics" to the public through its advanced and environmentally-friendly products and services.

Social Responsibility

While providing the consumers with first-rate products, SVW always commits itself to minimize negative impact of its products and activities on the environment through science and technology. As far back as December 1997, SVW became the first in the Chinese car-making industry to obtain the ISO14001 Environment Management Accreditation Certificate, and passed the same accrediting inspection for the second time in 2006. .

SVW's goal of sustainable development is to achieve the best result in the company's efforts at environment management, environmental friendliness of its products and satisfaction of market requirements. Now all SVW-made cars have met the state emission regulation at least two years in advance, and in this respect Passat, POLO, Touran and Octavia Mingrui have reached the EU IV standard. In December 2006, SVW received the Environmental Labeling Certificate issued by the State Environmental Protection Administration for its serial products, becoming one of the enterprises on the Governments' "Green Purchasing" list.

In the course of its own development SVW never fails to reciprocate the society and participate in various social and public activities. Over the 20-odd years, SVW has made donations totaling RMB 216 million yuan to science, educational, cultural and hygiene undertakings, as well as various other public welfare causes. In November 2006, SVW topped the list of "Most Influential JVs in China" in the appraisal of World Top 500 JVs in China conducted by Nanfang Weekend Newspaper, and it also headed the car-making industry in the list of "Social Responsibility Performance". These are convincing examples of SVW's good corporate image in China, and prove once again its leading position in the industry.

Core value of “striving for the best”

SVW keeps adjusting its business operation to face up to the rapidly changing market. Now SVW has started to shift itself into a “market oriented” company from the previous “product-oriented” one, and has drawn up clear-cut mid-and-long-term development strategy. In the next five years SVW will put out nearly ten all-new models covering all market segments. As a member company of the VW Group, which is an official automobile partner of the 2008 Beijing Olympiad, SVW is doing its best to display and develop the Olympic spirit of “Faster,Higher,Stronger” in its unremitting effort to “strive for the best” following its core value of "seeking after excellence".

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