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China skid: Where VW went wrong; German carmaker will boost capacity, restructure unit.

Automotive News Europe,  June, 2004  by Webb, Alysha

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Byline: Alysha Webb

Volkswagen's early entry into the Chinese auto market was a coup 19 years ago, but the terms of that deal are becoming a curse.

VW's once-dominant market share has slipped precipitously from 59 percent in 1998 to 26 percent. As the market matures, private owners are replacing the government as the biggest vehicle buyers in China, requiring a different approach to product planning, marketing and distribution.

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VW has been slow to respond to changes in the world's fastest-growing auto market - hampered by its two state-owned Chinese partners, FAW-VW ...

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