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EP 34: Volkswagen overcoming the Great Wall of cultural divide in China
23 Plays6 days ago
The news media are continuously reporting on the declining fortunes of foreign automakers in China. But what are the manufacturers doing to turn that story around? In this episode of The Auto Ethnographer, host John Jörn Stech takes a look into Volkswagen’s efforts to stem the decline and fuel a future rise.
Despite decades in China as one of the first automakers, and a commanding market share for most of those years, the market has shifted and Volkswagen has been struggling. The massive shift into EVs in the Chinese market seemed perfectly matched to VW’s own aspirations as an EV-focused brand. But something went wrong.
Volkswagen’s cars seemed to miss the mark with consumer tastes in terms of styling, electronics and digital functionality, and price. Pushed back on its heels, VW is now working to close the gap. They have formed several partnerships with local Chinese companies, such as Xpeng Motors and Contemporary Amperex Technologies Limited (CATL).
As important as the partnerships is the adaptation to working with the Chinese culture and adapting its strengths in rapid automotive development.
The Auto Ethnographer explores the situation, the solutions, and the direction that things are taking for Volkswagen. The jury is still out on the long term but the results of deep cultural changes and ways of working seem to be bearing fruit.
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Transcript
Introduction to Intercultural Agility in Automotive Industry
00:00:00
Speaker
This isn't just a Volkswagen or VW story. It really applies to any foreign brand operating in China. It's a case study in intercultural agility.
00:00:11
Speaker
In a globalized economy, legacy brands can't afford to be culturally rigid. Hello and welcome to the Auto Ethnographer. I'm John Steck, your host on this journey. We travel the globe to bring you stories about culture and the global automotive industry.
00:00:28
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Fasten your seatbelt and let's get started.
Challenges in China: Torque, Tech, and Translation
00:00:31
Speaker
Hello and welcome to this week's episode of the Auto Ethnographer. Today's episode is focused on a subject that whether you follow the auto industry or not, you have undoubtedly heard about the struggles of automakers in China for a variety of different reasons.
00:00:50
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This episode today is a tale of torque, tech, and translation. Not just language, but work styles, expectations, and cultural rhythms.
00:01:03
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It's the story, in this case, of Volkswagen. Volkswagen in English. Germany's automotive titan. They're trying to find their footing in China's electric vehicle revolution.
00:01:17
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Spoiler alert. It's not just about the horsepower anymore. It's about humility, hubris, and how Wolfsburg meets k Guangzhou in the fast lane.
Consumer Expectations and Volkswagen's Strategy
00:01:29
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Volkswagen has long been a symbol of German engineering precision. But in China, where EVs have evolve faster, frankly, than a TikTok trend, Volkswagen's legacy playbook has hit a wall.
00:01:43
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Sales have dipped quite precipitously, market share has stalled, and the ID series, Volkswagen's flagship EVs, were met with a collective meh from Chinese consumers.
00:01:58
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Why? Because the cars felt like they were designed for Düsseldorf, not Dongguan. As I've discussed previously with my guest, Grace Mo on another episode, Chinese consumers want tech forward digitally integrated vehicles.
00:02:18
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Think about voice assistance, seamless mobile syncing, infotainment systems that feel like, frankly, WeChat on wheels. Volkswagen, meanwhile, was still prioritizing torque curves and chassis stiffness.
00:02:34
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It's like showing up to a karaoke bar with a slide rule. Add to that a cultural mismatch in design aesthetics. Chinese buyers, especially younger ones, they crave sleek, customizable, expressive styling.
00:02:52
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Volkswagen's minimalist Bauhaus-inspired interiors, beautiful, yes. but in China, they get interpreted as being a bit cold and perhaps even outdated.
00:03:06
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Then comes the strategic pivot.
Collaborations with Chinese Tech Giants
00:03:09
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Enter XPeng and CATL, called cattle by some. These are two Chinese tech giants who've become Volkswagen's new best friends.
00:03:21
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In 2024,
00:03:23
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VW inked deals to co-develop EV platforms, share battery technology, and build a super fast charging network across 420 cities.
00:03:34
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This wasn't just a handshake. It was a full-on cultural immersion. Joint engineering teams were formed. German and Chinese designers sat side by side, iterating on everything from UI layouts, user interface, to battery architecture.
00:03:54
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VW even launched a new R&D hub in China, embracing the mantra, in China, for China.
00:04:04
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People to people cooperation. That's where things work or that's where things fail.
Bridging Cultural and Technical Gaps
00:04:11
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This is where the intercultural magic or friction really happens.
00:04:18
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Engineers had to bridge not just technical gaps, but communication styles. German teams leaned on structured workflows and long-term planning. Having personally worked at Mercedes-Benz in the past, I understand all of the committees and the process and the consensus decision-making.
00:04:38
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Chinese teams, on the other hand, favor rapid prototyping and agile sprints. Very different work styles. VW responded by promoting bilingual project leads.
00:04:53
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That's a start. Investing in intercultural training, another good start. And get this, adapting their internal timelines to match China's breakneck pace.
00:05:06
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It's like watching a symphony conductor learn how to conduct a freestyle jazz orchestra. It's a completely different game. It's difficult to figure out the recipe for a secret sauce on work style differences.
00:05:26
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Let's zoom in on the real tension, the human rhythms behind the machines. Let's start with work hours. Chinese teams often operate under the 996 mindset.
00:05:39
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That's 9 a.m. m to 9 p.m., six days a week. German teams, by contrast, they protect their work-life balance like it's a yeah sacred artifact.
00:05:53
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Emails after 6 p.m.? That can be a cultural faux pas in Wolfsburg. In fact, in some German states, it's even illegal to work outside of regular work hours, and companies may even shut down their email servers.
00:06:09
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I was confronted with this when I worked for Mercedes-Benz, where the state of Baden-Württemberg would literally hold managers criminally liable if their employees were working outside of work hours.
00:06:26
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Another factor is decision-making. Chinese teams lean much more hierarchical. Decisions flow top-down fast German teams, on the other hand, prefer consensus, documentation, and deliberation.
00:06:44
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Here, one side says, go, and the other side says, let's discuss it first. On communication, Chinese engineers often use indirect language to preserve harmony, to preserve face,
00:07:00
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German engineers, they are direct, they are precise, and they can sometimes be quite blunt. Feedback loops can feel like a game of children's telephone crossed with a courtroom cross-examination.
00:07:18
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It's soft talk merged with hard talk, and the two can talk right past each other. Then there's flexibility versus structure. Chinese teams, they can pivot very quickly, embracing change.
00:07:33
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German teams, they value stability. They value process and especially predictability. Here you have agile meets committee structures or Gremien as they're called in German.
00:07:48
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And it's not always a graceful mishmash between the two different processes. I can remember from my days at Mercedes Benz that there was an entire plan an entire document that illustrated all of the gremien or committees that had to participate, for example, in product management decision making.
00:08:14
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These differences, they're not flaws. They're just cultural signatures. It's two different countries, two cultures, they work differently. But when deadlines loom and expectations clash, they can become stress points.
00:08:32
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VW success depends on how well it can harmonize these rhythms and quickly. These are real adjustments in real time.
00:08:45
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Volkswagen doesn't have forever to make these changes. The competition is moving quickly and Volkswagen has to keep up. It means that they literally have to continue building the airplane while they're already flying it.
00:09:01
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To make this work, Volkswagen had to rethink everything from meeting schedules to performance reviews where feedback is given. Again, blunt versus soft language.
Adapting to Chinese Market Demands
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They introduced hybrid workflows where they blended the agile sprints, which were prevalent in the Chinese work style, with the German style checkpoints, the Meilensteine or milestones.
00:09:32
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They created time zone sensitive collaboration windows. which respect both the Chinese urgency and the need for speed and German boundaries on work-life balance.
00:09:48
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That way everybody could be happy.
00:09:53
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They also empowered intercultural mediators. These are these bilingual leads that I mentioned earlier who could decode the feedback. They can soften the tone and then they can also translate the intent so that nothing is lost in translation.
00:10:13
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These aren't just HR tweaks or adjustments. These are really strategic imperatives because if the people behind the product can't synchronize, the product can't possibly succeed.
00:10:29
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Has it worked? Sort of.
00:10:34
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VW's EV share continues to remain relatively modest But the partnerships have shaved months off of development cycles.
00:10:45
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And this is in many ways the holy grail. Shorten the development cycle and be able to freshen the product and bring newer product faster to the market. The new co-developed products are expected to launch in 2026, next year.
00:11:01
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And early prototypes, they show promise. They seem to exhibit sleeker designs, smarter, more consumer-oriented technology, and pricing that doesn't necessarily scream Euro premium.
00:11:17
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It's built and oriented for the Chinese consumer.
00:11:22
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Most importantly, VW is learning to listen to the local consumer, to its Chinese partners, and to the cultural rhythms that define success in the world's largest auto market, where 27 million vehicles are sold per year.
00:11:42
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There are broader implications though. This isn't just a Volkswagen or VW story. It really applies to any foreign brand operating in China. It's a case study in intercultural agility.
00:11:56
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In a globalized economy, legacy brands can't afford to be culturally rigid. Whether you're selling cars, cosmetics, or consulting services, you've got to meet the people where they are, not where your headquarters is.
00:12:13
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Furthermore, VW's journey reminds us that innovation, it's not just technical, it's relational. It's about trust, empathy, and the willingness to say, maybe our way isn't the only way.
00:12:31
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So what's next for Volkswagen and the other foreign brands in China? If they keep leaning into collaboration, into cultural fluency and consumer centric design, they might just reclaim their edge.
00:12:48
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But If they revert to old habits, they risk becoming a cautionary tale, proof that torque alone and body rigidity alone won't drive global relevance.
00:13:04
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And remember, in the age of electrification, the loudest thing in the room might just be that cultural misunderstanding.
The Impact of COVID-19 on Market Dynamics
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It's always a learning process curve for any brand working in a new country and a new culture other than its home market. And occasionally crisis arises, as is the case currently occurring in in China for many brands that have been there even for decades.
00:13:37
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But the market has shifted and changed so rapidly, somewhat camouflaged under the time during COVID and the COVID lockdowns. that it surprised them.
00:13:48
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It caught them off guard. And now they have to play the catch-up game. Every company is trying it in a slightly different way. This was the story looking at the cultural adaptation from Volkswagen.
00:14:03
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I'll see if I can find some stories from some of the other automakers who are trying different strategies. That's it for this week on the Auto Ethnographer.
00:14:13
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If you enjoyed the episode, Please subscribe to the podcast, leave a review and share it with a friend. Until next week, keep on driving.
00:14:26
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Thank you for joining us on today's
Conclusion and Engagement
00:14:28
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journey. Please remember to like and subscribe to The Auto Ethnographer and leave us a rating or comment. For more information, visit our website at auto-ethnographer.com.
00:14:38
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