#China

Audi is further intensifying the collaboration with SAIC and SAIC Volkswagen in a Cooperation Agreement. Audi and SAIC have decided to jointly develop new models built on a China-specific platform named “Advanced Digitized Platform” for the next generations of premium intelligent, connected vehicles (ICV). Cooperation starts with three BEV models covering B and C segments to quickly enter into the dynamic and fast-growing electric vehicle market in China.

The Beijing Auto Show took place from April 25 to May 5. At its Media Night on April 24, the Volkswagen Group presented product highlights and progress in its "in China for China" strategy.

Volkswagen is systematically forging ahead with its “in China, for China” strategy. The goal is even closer alignment with the specific requirements of customers in the world’s largest auto market and to provide them with a convincing product offering in all relevant segments. The ID. CODE design show car that celebrates its world premiere this week at the Auto China 24 trade fair in Beijing (from April 25 to May 4, 2024) bears witness to this systematic orientation to the wishes of Chinese customers. The concept car’s aesthetics are completely new and give a preview of a large electric SUV. The ID. CODE is designed for Level 4 fully autonomous driving. The new progressive ID.UX sub-brand also plays a key role in terms of Volkswagen’s profile in the Chinese market. With all-electric, lifestyle-oriented models, this sub-brand is designed to appeal to younger customers in particular.

Volkswagen launches the next phase of its transformation in China. At its China Capital Markets Day in Beijing, Volkswagen Group presented its strategy update for the Chinese market. The focus is on its target to strengthen tech capabilities and reduce costs in the strongly growing market. The Group plans to achieve cost parity with local competition in the compact car segment by 2026 and gain further momentum through a re-aligned strategy and an efficiency program that was launched already. In addition, the company underlined its commitment to its “in China, for China” strategy: It presented measures to cater even better to the needs of Chinese customers, accelerate model developments and time-to-market as well as significantly reduce costs. In addition, the aim is to better harness the innovative power of the market and increase local value creation through more in-house development capabilities and strong local partnerships. As a result, the Group aims to strengthen its position as the #1 international OEM in the Chinese market and has set ambitious targets until 2030: Approximately 4 million vehicles sold and growth in proportionate operating result to around EUR 3.0 billion, including the fully consolidated Anhui joint venture.

The CMD took place on April 24, 2024 at the Phoenix Center, Beijing.

At Auto China 2024, the Volkswagen Group and its brands demonstrate their innovative strength with an impressive line-up of China specific products. Six world premieres and five China premieres are the highlights among the 44 car and motorbike models on display. Through a strong ‘In China, for China’ approach, the Group set the course for accelerated technical localization, as well as faster production and development, to ensure it continues to offer tailor made products in China now and in the future. The transformation is well underway, and the market-wide product offensive with a focus on smart, connected vehicles tailored to Chinese consumers is accelerating to ‘China speed’.

The Volkswagen Group is stepping up the pace of innovation ‘in China, for China’ and systematically driving forward the digitalisation of its model portfolio. Together with XPENG, Volkswagen is introducing the China Electrical Architecture (CEA), a zonal Electrical/Electronic (E/E) architecture. Jointly developed by experts from XPENG, Volkswagen China Technology Company (VCTC) and CARIAD China, the CEA will ensure the rapid expansion of digital services in the Volkswagen brand’s China-specific vehicles. Advanced features such as autonomous driving can be seamlessly integrated and continuously updated and extended 'over the air' (‘OTA’). At the same time, thanks to the zonal structure, the number of electronic control units in previous systems can be reduced by up to 30 per cent. As a result, the zonal E/E architecture will be cost competitive with local offerings. The new digital network is envisaged to be used in locally produced VW brand electric vehicles from 2026. The move will strengthen Volkswagen’s ‘electric offensive’ and mark the latest decisive step as one of the industry leaders in the age of intelligent connected vehicles (ICV).

The Volkswagen Group has been a pioneer for individual mobility in China for 40 years. Today, Volkswagen's network in China features 39 plants, 90,000 employees and around 50 million customers who drive a Group brand vehicle. Together with its Joint Venture partners, Volkswagen is an integral part of China's industrial ecosystem and has created strong foundations. With its rapid transformation towards fully connected electric mobility, the Group is consistently realigning its activities in the region. Through the consistent implementation of its 'In China, for China' strategy, Volkswagen is driving forward the localisation of development and aligning its products with changing customer needs. In the latest strategic milestone, Volkswagen is further expanding its production and innovation hub in Hefei, Anhui Province, with investments totaling 2.5 billion EUR. In addition to the expansion of R&D capacity, preparations are also being made for the production of two Volkswagen brand models, which are currently being developed together with Chinese partner XPENG. Production of the first model, an SUV in the mid-size segment, will begin as early as 2026.

Volkswagen Group is consistently driving its e-offensive in China for China. Volkswagen and XPENG have entered into a Master Agreement on platform and software collaboration, marking a significant milestone in their strategic partnership. In December 2023, Volkswagen completed the acquisition of shares amounting to around 4.99 per cent of the total issued and outstanding share capital of XPENG, at that time following the announcement of the partnership in July. The Master Agreement centres on the initial joint development of two mid-size Volkswagen brand vehicles, which will launch first with a SUV. This will enable the VW brand to expand its existing portfolio quickly, to reach new target customer groups in the fast-growing EV market in China. The two jointly developed e-models will be equipped with state-of-the-art software and hardware, offering Chinese customers an intuitive, connected digital experience and advanced automated driving functions. All parties are contributing their respective core competences to the joint development work.

The Volkswagen Group is strengthening its Technical Development Board function in the China region as part of its “In China, for China” strategy. Thomas Ulbrich, former Member of the Board of Management of the Volkswagen Brand for “New Mobility”, will head up Technical Development for the Group in China from April 1, 2024. In his new capacity, Ulbrich, who has already held two management positions for the Group in China, will continue to advance the technological localization of the portfolio. He succeeds Marcus Hafkemeyer, who – with his extensive experience of China – will support the company’s transformation in a new role in the Group.

The Volkswagen Group is systematically strengthening its development expertise ‘in China for China’. To drive this strategy, Volkswagen is expanding its site in Hefei in eastern China into a state-of-the-art production, development, and innovation hub. At its heart is the Volkswagen China Technology Company (VCTC) – the Group's largest development centre outside Germany, with a clear focus on intelligent, fully connected vehicles. VCTC aims to reduce the time to market for vehicles and components by 30 percent through efficient development processes and the use of cutting-edge technologies. As a result, the Group will better harness the growth momentum of the Chinese market. The hub is also taking on key development tasks, including the development of a local electric platform for the entry-level segment. Derived from the Group's modular electric drive matrix (MEB), the new platform is intended to open up further market segments in China. From 2026, the platform will form the basis for additional battery-powered vehicles (BEV) specifically tailored to the wishes of Chinese customers. The development time of just 36 months is around a third shorter than the Volkswagen Group's previous timescales.

The Volkswagen Group is strengthening its position on the Chinese automotive market with cooperations between the VW brand and XPENG and between Audi and SAIC. The Group is thus forging ahead with its local electrification strategy. The aim is to swiftly tap into new customer and market segments, thereby systematically leveraging the potential of China’s dynamically growing e-mobility market.

The Volkswagen Group is systematically expanding its development expertise ‘in China for China’. The company is investing around EUR 1 billion in a new state-of-the-art development, innovation, and procurement centre for fully connected intelligent electric vehicles in the southern Chinese city of Hefei. The announcement was made today by the Volkswagen Group at the Shanghai Auto Show. The new company, with the project name ‘100%TechCo’, combines vehicles and components R&D teams with purchasing. This will leverage synergies in the development process and integrate state-of-the-art local technologies into product development at an early stage. The aim is to align the Group’s vehicles even more quickly with the wishes of Chinese customers and to achieve shorter time to market. With the launch of 100%TechCo in 2024, the development times of new products and technologies will be gradually shortened by around 30 percent.