Preparations are also underway for the production of two models of the Volkswagen brand made by Chinese partner XPENG to start in 2026, the group said.

Ralf Brandstaetter, member of the Volkswagen Group’s board in China, said the Hefei site will bring technology to the market by about 30 percent as the company increases car production in the country.

Volkswagen handed over its title as China’s best-selling car brand to electric car maker BYD by the end of 2022 and announced a series of new electrified models on its portfolio in China as it battles to regain ground.

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