Two years ago, Volkswagen in China risked becoming a famous case study at business schools: the company that threw away a dominant position in China just as the market began to take off.

The German group at one stage sold about 50 per cent of the cars in China, which in the early 1990s provided a large chunk of the group’s profits. But competition mounted as other multinationals rushed in to build plants, the market share dropped and the business began to record losses. Some people began to write VW off in the country.