Volkswagen has admitted it lost its way in China, where it sells a third of its cars, saying it suffered a "terrible wake-up call" after discovering its brand reputation had plummeted in the eyes of the Chinese.

The admission was made by the German carmaker's chief marketing officer Alexi Orlov, who was speaking at the Cannes Lions International Festival of Creativity on Tuesday, alongside the PepsiCo chief marketing officer Richard Lee, discussing what it takes to crack the Chinese market.

Orlov said: "Thirty years Volkswagen has spent in China. In 2012, we had to spend $1bn on marketing just on the VW brand just to stay in that market. Despite the fact that we had a record breaking 2011 we still had to spend that amount of money. "We had an over-reliance on short-term spend and we had relied on awareness but it was not awareness we should have been worried about but effectiveness. We had a terrible wake-up call in 2010 when we discovered much to our surprise and horror that we were only the 126th best ranked in China as best-loved brands."

Read the full report on The Guardian