Volkswagen revs up electrification shift to deepen China presence

TIANJIN - German carmaker Volkswagen Group is revving up its electrification transformation in a bid to expand its presence in the Chinese market.

"With a resilient market position, we are laying the foundation to further accelerate our e-offensive, develop our local technological capabilities, and fully prepare our business for the future," said Ralf Brandstatter, chairman and CEO of Volkswagen Group China.

Stefan Mecha, head of group sales of Volkswagen Group China and CEO of Volkswagen Passenger Cars Brand for China, said: "We achieved a solid sales result in the first half of 2023 despite a persistent price war in the market. The pronounced growth in NEV models confirms demand is emerging in the segments most relevant to us."

Volkswagen's share of China's internal combustion engine (ICE) vehicle market expanded from 18 percent to 20 percent in the first half of 2023, while its deliveries of new energy vehicles (NEVs) increased to 89,700 units, up 4.8 percent year on year. The carmaker delivered a total of 1.45 million vehicles in the Chinese mainland and Hong Kong in the first half of 2023.

Under its electrification strategy, the group, which owns 10 brands including Audi, Lamborghini and Bentley, plans to expand its range of fully electric vehicles to 30 models by 2030 to maintain a strong market position in the dynamically developing market in China.

Volkswagen is scheduled to launch its new ID.7 sedan in the second half of this year. Audi is expected to launch the Audi e-tron GT quattro in the coming weeks and three new models on the basis of the Premium Platform Electric (PPE) in 2025 and 2026. Porsche also has plans to launch new luxury electric vehicles in the next few years.

Volkswagen is strengthening its local research and development capacities for e-mobility as well as digitalization and autonomous driving by working with high-tech companies in China.

The company has cooperated with Horizon Robotics, a leading provider of hardware and software solutions for automated driving in China, to strengthen the development of advanced driver assistance systems (ADAS) functionalities, as well as competence in chip design.

Together with ThunderSoft, a manufacturer of products and technologies for intelligent operating systems, Volkswagen is further expanding its expertise in infotainment and connectivity.

The Volkswagen Group announced last week that the Volkswagen brand and the Audi brand have signed a memorandum of understanding with China's FAW to further deepen long-term cooperation. The two sides will further integrate resources and create synergies to help the brands further strengthen their advantages in the fuel vehicle and NEV markets.

As an important part of the group's electrification transformation, fuel models are gradually developing in the direction of hybrid. The Audi brand and FAW will further expand their product lineup to meet China's high-end market demand in the new era of mobility.

Cui Hongjian, director of the Department for European Studies at the China Institute of International Studies, said China-Germany relations have shown strong resilience in recent years, with many German companies continuing to increase investment in China, and China has always regarded Germany as a major partner in Europe.