Volkswagen ramping up profile in Chinese market

German automaker Volkswagen is solidifying its standing in the Chinese market by revving up its commitment to electrification and strengthening its cooperation with Chinese partners.

"China is our largest single market worldwide and holds an unassailable and irreplaceable position in our global operations," Volkswagen Brand CEO Thomas Schaefer told a Thursday media conference.

Volkswagen is increasing investments in e-mobility research and development, as well as design and production, to meet the needs of Chinese consumers, Schaefer said.

From January to July of this year, the company delivered 1.26 million vehicles to the Chinese market. The sales of new energy vehicles reached 89,700 in the first half, up 4.8 percent year-on-year.

"Despite intense market competition, we have achieved a solid sales result," said Stefan Mecha, Volkswagen Brand's China CEO, adding he anticipates a better performance in the pure electric sector.

Later this year, Volkswagen will launch its new pure electric model ID.7 Vizzion, which debuted at the Shanghai auto show in April.

Mecha said the launch will accelerate the company's electrification transformation in China.

Another all-electric models will roll off the production line at Volkswagen Anhui, the group's first joint venture in China specializing in NEVs, during the first half of 2024.

Volkswagen plans to introduce more NEV models over the next few years while enhancing collaboration with Chinese partners in R&D, production and supply chains to better respond to consumers and implement its "In China, for China" strategy, Mecha said.

In late July, Volkswagen invested around $700 million to purchase a 4.99 percent stake in Chinese smart electric vehicle startup Xpeng. The two sides will work together to roll out two mid-sized NEVs in 2026, according to a joint statement. The models will bear the Volkswagen brand while utilizing Xpeng's technologies in software and autonomous driving.

"Our teamwork with Xpeng will bring many benefits by expanding our product portfolio and helping us achieve breakthroughs in sales and technology," Schaefer said.

Meanwhile, Volkswagen's collaboration with Horizon Robotics, with which it signed a 2.4 billion euros ($2.59 billion) deal last year, is progressing smoothly, said Mecha. The company is one of China's leading providers of software solutions for smart vehicles.

"Volkswagen is about to celebrate its 40th anniversary of entry into China. We have joined hands with many Chinese partners throughout that 40-year journey, which is our key advantage," Schaefer said.