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According to overseas media reports, Volkswagen Group will adjust its brand positioning strategy to shift its Skoda brand to the low-end market, while the Seattle brand will develop to the high-end market.

It is understood that Volkswagen plans to use Skoda as an entry-level model brand to seize market share and shift its focus to Eastern Europe and developing countries to compete with Hyundai, Kia, Dacia and other brands; while Seattle turns to compete with luxury brands such as Alfa Romeo.

At the beginning of this year, Volkswagen Group CEO Herbert Dis said in an interview with the media that Volkswagen Group is reviewing the development of its brands and is expected to complete the adjustment of its brand development strategy within this year in order to reduce operating costs and improve overall profitability.

However, there is no news to know whether the plan will affect the country. In China, Volkswagen is divided into FAW-Volkswagen and Shanghai Volkswagen, while Shanghai Volkswagen is divided into two brands: Volkswagen and Skoda. And the three brands are sold separately, the price of Skoda is relatively lower, but Skoda has never officially said that it is lower than Volkswagen, it looks like there is a competitive relationship.

In fact, the marketing of Volkswagen brands is very successful in the domestic market, and Volkswagen is well aware of the needs of the domestic market, as can be seen from the sales at the top of the list every year. In the face of the highly competitive market, especially the occupation of Japanese brands, SAIC-Volkswagen's market positioning for Skoda is the middle and low-end market, which is to make up for the deficiency of Volkswagen.

What if Skoda's price is lower than Volkswagen but no increase in sales? In fact, the price will be reduced, the cost will also be reduced, Skoda is inferior to Volkswagen in many configurations and materials. For example, the engine block material of Tuguan L is made of aluminum alloy, while Kodiak's engine material is made of cast iron; the soundproof cotton under the engine cover is standard, but Kodiak does not have either high or low configuration.

In the face of SAIC's marketing strategy, FAW-Volkswagen also launched a lower-end brand, Jetta, as a brand-new brand, with sales exceeding 10,000 in its first month on the market, reaching 130 per cent of the target of 11080 vehicles.

I have to say, Volkswagen is very successful in China, with solid product quality, as well as in line with the Chinese market price positioning and strategy, so that it gets good sales in China. At the same time, in the face of the launch of FAW-Volkswagen Jetta, I wonder if Volkswagen's plan is to use Skoda as a rival to Jetta?

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