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It now appears unlikely that Volkswagen will achieve its sales targets in China by year’s end. Sales figures for the first half of the year have not been particularly rosy, prompting Volkswagen AG to pump in money to subsidise its dealers in China. Based on industry data, the group’s sales in China have seen a drop of 10% for the first six months of 2015.

According to a report by Bloomberg Business, sources have revealed that Volkswagen AG is said to be pushing financial assistance amounting to some 1 billion RMB (RM610 million) to its dealers in China to help them cope with a slowing market. “Dealers are facing some hardships,” Li Pengcheng, spokesperson for FAW-Volkswagen said.

In April this year, Jochem Heizmann, CEO of Volkswagen Group China, had already indicated that the slow demand for the year would not get better due to the absence of a budget SUV and MPV from the group’s product range, especially at a time when there’s a sudden upsurge in appetite for the likes of the two.

In the same report, Janet Lewis, analyst at Macquarie Group Hong Kong, also shared the same view. “Volkswagen has been under particular pressure due to its lack of SUV products at a time when SUVs are growing much faster than the overall market,” Lewis said, supporting Heizmann’s statement.

Will the introduction of new SUVs help the company compete against the likes of the Honda HR-V, Subaru XV and similar urban rivals? Perhaps the question boils down to how much Volkswagen’s very own version will cost its buyers.