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Looking back at the Volkswagen brand's product formation and sales performance in recent years, it is not difficult to see that sales have soared as the Volkswagen brand continues to expand its SUV models. But it is this product formation that gradually helps Volkswagen brand expand to various regions that is saturated in the eyes of Volkswagen executives and says it will not expand SUV models any more.

Frank Welsch, head of research and development at Volkswagen, said recently: "I think the current SUV formation layout is saturated for the Volkswagen brand and can't accommodate more SUV models. Although there is still a big market for SUV models, we don't need 10 SUV models, but more successful SUV models, otherwise we won't be profitable."

Welch also mentioned that Volkswagen will also phase out MQB platform models, but Welch did not disclose specific models. At the same time, VW will also introduce more electric vehicles, so that VW has a similar number of lineups, although it may be less for SUV formations than it is now, but there will be representatives in each segment. This also includes the first electric SUV model ID 4, which will be released this year.

In fact, the success of SUV expansion is one of the reasons why Volkswagen brand has won the first place in global sales for two consecutive years. According to Volkswagen's 2019 earnings report, the main reason for the company's profit surge was the increase in SUV sales and the drop in diesel emissions settlement from 3.2 billion euros to 2.3 billion euros. Of particular concern is that sales of higher-margin SUV models have risen from less than 25 per cent in 2018 to 40 per cent in 2019. Among them, Volkswagen Tiguan model alone produced 910,900 vehicles in 2019, accounting for 8.3% of Volkswagen's total sales, making it the best-selling model of Volkswagen and the group.

Looking at the Chinese market with the largest proportion of Volkswagen, since 2010, after the official launch of Tiguan, Volkswagen's first SUV model, Volkswagen has started to launch two new models every year since 2017, attacking SUV market segments and covering product series in each market segment. In the past 9 years, it has built a huge SUV formation in China and won the first place in the sales volume of joint venture SUV in China in 2019.

Although Volkswagen sold between 3.12 million and 3.13 million passenger cars in China in 2017,2018 and 2019, the gap was only a few thousand. However, without changing the overall sales volume, the sales proportion of Volkswagen SUV models has increased from 14.7% in 2018 to 27.4%, nearly doubling, which undoubtedly indicates that Volkswagen's SUV formation layout in China is relatively successful.

Of course, for the Chinese market, SUV market performance in recent years has also been rising, and coupled with Volkswagen's position in the hearts of Chinese people, also clinch a deal Volkswagen sales performance in China.

At the same time, Volkswagen's SUV formation in China is also quite large. According to the accumulative total of SAIC-Volkswagen, FAW-Volkswagen and imported SUV models of its two joint ventures in China, it has exceeded 10 models, covering various subdivided fields and including niche models. However, the launch of Volkswagen's new SUV in China has not stopped yet, and according to its plan, two new SUV models will be launched this year, namely, the sister models of Tanyue Coupe and Touang.

At the launch of the two models, Volkswagen also announced that by 2020, the number of Volkswagen brand SUV models in the Chinese market will increase from six to 12. In terms of market sales, one in five Volkswagen brand models is currently an SUV, and this ratio is expected to become 50 to 50 by 2025.

Although Volkswagen knows Chinese consumers very well and has an absolute advantage in the SUV market in the Chinese market, I don't know if the Chinese market will no longer consider accelerating the layout of SUV formations, but accelerating the transformation of electric vehicles, as the head of Volkswagen R & D said.

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