40 years of Volkswagen in China: Group accelerates its restructuring with “China for China” strategy

Additional models accelerate the electrification of the Volkswagen Group’s model portfolio in China and expand market coverage. From 2030, more than 30 electronic models from all Group brands will be produced in China. The main unit to customize the products is Volkswagen China Technology Company (VCTC) headquartered in Hefei. It is taking on major development tasks – in close cooperation and joint ventures – and is also developing China’s first dedicated electric architecture, the China Central Platform (CMP), which at least four additional models of the entry-level electric segment in the class compact will be created from 2026.

Ralf Brandstätter, Member of the Board of Management of Volkswagen AG China: “Today, almost 50 million customers in this region drive the Group’s product. The basis of this success is the cooperation with our strong joint venture partners SAIC and FAW. Together we will now accelerate the transition towards smart electric mobility. With our “China for China” strategy, we have a solid plan and continue to accelerate the restructuring of our business. We focus on more customer focus, more speed and more internal development. The new production and development center in Hefei will bring the technology to market maturity nearly 30 percent faster in the future. Additional investment in this area underscores our ambition to rapidly expand our in-house innovation capabilities.

A clear strategic focus on the needs of Chinese customers creates a solid foundation for the future

Over the past four decades, the Volkswagen Group, together with its long-term Chinese partners SAIC and FAW, has positioned its strategy precisely according to the needs of Chinese customers. With Santana and Jetta, millions of customers were able to start with personal mobility. Later, the first China-specific models such as Lavida and Sagitar were added, which became million sellers and are still very successful in the market today. The electrification strategy was finally launched in China in 2017.

Also in 2017, China’s first clean electric vehicle venture was established in Anhui by manufacturer JAC. Today, Volkswagen Anhui is the first joint venture for Volkswagen Group cars in China. The location in the eastern region of China is the group’s production, development and purchasing center in China and is being expanded into a strategic innovation center in China, for China.

With the strategy of “in China, for China”, the Volkswagen Group adopts a dynamic market development and, through advanced localization, uses the innovative power of the market to accelerate its transformation in China. By building its development capabilities and cooperation with local high-tech companies as well as Chinese manufacturers such as XPENG and SAIC, the group is not only expanding its product portfolio to additional electric vehicles, but also introducing products such as local news. technology at the “speed of China Models”. This means that development times can be shortened by more than 30 percent and products can be completely tailored to the specific needs of Chinese customers.

40 years, 39 plants and almost 50 million customers – Volkswagen has a strong base in China

In the highly competitive Chinese market environment, the Volkswagen Group can build on its strong market position. The group not only leads the open market in China when it comes to new registrations, it also occupies the top position in terms of vehicle inventory: almost 50 million customers now drive cars from the group’s brands. In addition, brand loyalty for the domestically produced Audi and Volkswagen brands is above the market average. Volkswagen’s 40-year presence in China is an advantage in a rapidly growing market.

More than 3,500 dealers in the nationwide retail network are the customer contacts of Volkswagen Group brands. Customers can choose from 160 car models from the Audi, Volkswagen, Porsche, ŠKODA, Bentley and Lamborghini brands – and motorcycle manufacturer Ducati also offers ten of its models in China.

Volkswagen produces in 39 plants in China, making it an important part of the country’s industrial ecosystem. Strong partnerships unite the Volkswagen Group with Chinese high-tech companies Horizon Robotics (autonomous driving tasks), Thundersoft (infotainment) and ARK (user experience). 90,000 employees work for the group in China. This makes Volkswagen the largest European employer in China.