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TheStreet Open House

When Volkswagen Entered China

NEW YORK ( TheStreet) -- As Volkswagen competes to become the world's biggest automaker, largely on the strength of its China sales, a new book recalls the automaker's early days in what is now the world's leading auto market.

The autobiographical book Bridge Builder by Walter Kiep, published by Purdue University Press, recounts the journey of one of post-war Germany's leading entrepreneurs, businessman and semi-official diplomat who was the longtime chairman of Atlantik Brucke, the influential German-American friendship organization.

Born in 1926, Kiep lived through a remarkable period in German history that includes the rise of Nazism, defeat along with economic and structural destruction, and then a re-emergence which he helped to shape as one of the world's leading powers. VW has a parallel story.

Shortly World War II ended, a young Kiep went to work on the Ford (F) production line in Cologne. At the time, Ford in Germany produced small trucks for sale exclusively to Allied armed forces. In 1948, Kiep became a Ford salesman at a propitious time, because that June monetary reform and the creation of the deutsche mark suddenly reinvigorated the economy. "When currency reform came, a big boom began," Kiep recalled.

Initially, most Germans could not buy cars, but that did not stop Kiep. He sold Fords to allied forces and, realizing he could sell auto insurance as well, became an agent for a U.S. insurance firm. In 1955, he took over the division of another U.S. auto insurance firm just as Germany's auto industry was taking off. His main client was Volkswagen, which was in the early stages of producing the Beetle and exporting them to the U.S. At peak in 1970, nearly 600,000 Beetles were shipped here. The outgoing Kiep was in the middle of it, providing insurance for the shipments and building friendships in this country.

He also entered German politics, becoming in 1974 finance minister of Lower Saxony, one of the 16 German states, which held a stake in VW. This got him a seat on VW's board. He stayed there for 21 years and played a key role in the automaker's entry into China, which began with 1982 negotiations with the mayor of Shanghai, leading to a deal to build a plant there.

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