The Competitive Strategy Analysis For FAW-VW Financial Leasing Business

FAW-Volkswagen Automobile Co.,Ltd.(FAW-VW for short)is a joint venture created by FAW Group of China and Volkswagen Group of Germany.The structure of the joint venture is 60% FAW,30% Volkswagen and 10% Audi.As an excellent automobile joint venture in China,it has always been a leader in the automobile industry from the perspective of sales,market share and profitability.But in recent two years,the development of domestic automobile industry has entered a period of slow growth or even negative growth.At the same time,consumers' travel habits and consumption concepts are constantly changing.FAW-VW is facing great pressure of sales growth and profit growth.According to the change of market situation,such as the trend of "four modernizations" of automobile itself,namely "electrification","intellectualization","networking" and "lightweight",FAW-VW is adjusting its strategy rapidly.The strategic layout of automobile financing leasing business is a key link: on the one hand,financing leasing business can reduce the threshold for customers to buy cars and increase sales;on the other hand,the profit margin of financing leasing business is much higher than other businesses.The survey results show that foreign mature automobile groups or automobile brand financing leasing business can effectively increase profits.With the change of the concept of saving and installment,as well as the improvement of the national credit information system and relevant laws and regulations,more and more consumers choose to buy automobiles by installments.According to the latest statistics,the proportion of car purchases by installments and cash is 4:6,and the ratio of automobile purchase by financing lease is 5%.It can be seen that there is a huge gap between the automobile financing leasing in the mature foreign market,which indicates that China's automobile financing leasing business is just in its infancy.Automobile enterprises,financial institutions,dealers,consumers and even government agencies still need to be more familiar with this concept,and how to formulate relevant laws and regulations,automobile enterprises and financial machinery for government agencies.How to cultivate the automobile financing leasing market and how to benefit consumers in this way need to be explored by all parties.This also indicates that China's automobile financing leasing business has great potential for development.Firstly,this paper elaborates the research background and significance of the article,as well as Michael Porter's three basic competitive strategies and the main strategic analysis tools: external PEST analysis,Porter's five-force model,SWOT analysis and other strategic management and analysis theories.Secondly,based on the literature analysis of the development status of domestic and foreign automobile financing leasing business,the development trend of automobile financing leasing business in China is discussed.At the same time,this paper systematically analyses the current development status,operation mode,existing problems and causes of the financing leasing business of FAW-VW.Thirdly,using the mature strategic analysis tools PEST analysis and Porter's five-force model,the macro-environment and industry competition environment of FAW-VW automobile financing leasing business are studied in detail,and the strategic choices FAW-VW faces are discussed by SWOT analysis tools.Fourthly,the advantages and disadvantages of FAW-VW's strategic choices are systematically analyzed.On the premise of FAW-VW's strategic adjustment from automobile manufacturer to mobile travel service provider,the optimal value-cost leading strategy is adopted.At the same time,in order to ensure the implementation of the strategy,specific safeguards are put forward from the aspects of organizational restructuring,talent reserve and information system construction.This paper discusses the competitive strategy of passenger car financing and leasing business,which has important strategic and practical significance for the transformation of domestic automobile enterprises from a single automobile product company to a comprehensive service provider of automobile consumption.