Volkswagen accelerating localization strategy for Chinese market

Imaginechina

Volkswagen is pushing ahead at full speed with its localization strategy for the Chinese market, the world's largest automotive market, Oliver Blume, chairman of the Board of Management of Volkswagen AG, told Xinhua at the ongoing Auto Shanghai 2023.

"With its high level of innovation, China is an important pacesetter for the entire automotive industry," Blume said, adding that Volkswagen's presence at the auto show is another important milestone in the group's "in China, for China" strategy.

Volkswagen had a promising start in the Chinese market this year. Blume took one of its brands Porsche for example, which saw sales in the first quarter 20 percent higher than last year. "We will have a very strong second half of the year in the Chinese market," he said.

Volkswagen is presenting 20 electric vehicles at the exhibition, which kicked off Tuesday and will run until April 27. By the end of 2030, the group will offer more than 30 all-electric models to customers in China, according to Blume.

"We come from a very strong position in the internal combustion engine market. We want to keep it for the next several years while joining the strong ramp-up curve of electric mobility," Blume said.

Volkswagen will massively strengthen its local competencies not only for e-mobility but also in the areas of digitalization and autonomous driving, including software and R&D, Blume added.

Volkswagen's software unit CARIAD will upgrade its software experts to 1,200 to accelerate the digitization of vehicles in China. In addition, there are about 2,000 Chinese developers in Volkswagen Anhui, the group's first joint venture in China that focuses on the R&D and manufacturing of NEVs.

"We are significantly accelerating our decision-making and development processes locally. A strong position in the Chinese market strengthens our global competitiveness," Blume said.

The group announced at the auto show that it will invest around 1 billion euros (US$1.1 billion) in a new development, innovation, and procurement center for fully connected intelligent electric vehicles in Hefei, capital of east China's Anhui Province.

The new company, with the project name "100percentTechCo," combines vehicles and components R&D teams with purchasing, which will align the group's vehicles even more quickly with the wishes of Chinese customers and achieve a shorter time to market. With the launch of "100percentTechCo" in 2024, the development times of new products and technologies will be gradually shortened by around 30 percent.

"In the next five years, we will invest about 180 billion euros, and a major part goes into electromobility, digitalization, and connectivity, and the products in China will benefit from these investments," Blume said.