The Wolfsburg-based carmaker wants to regionalize development more in order to better meet customer needs in China.
(Photo: dpa)
Shanghai Volkswagen intends to increase the speed of development significantly in its most important market, China. To this end, the company is investing around one billion euros in a new development, innovation and procurement center in the southern Chinese city of Hefei. The group announced on Tuesday at the Shanghai Auto Show that fully networked intelligent electric vehicles are to be produced there around 30 percent faster than before.
VW is under enormous pressure in its most important sales market. According to its own statements, the group delivered 3.2 million vehicles last year, and more than four million in good years.
In the first quarter of 2023, the Chinese rival BYD also overtook the core brand Volkswagen in terms of the number of new registrations in China. VW has been the market leader in the Asian country more or less since the 1980s and sells almost 40 percent of its annual production there.
VW China boss Ralf Brandstätter has therefore been talking about “Chinese Speed” for a long time, an extra speed level for his sphere of influence. The main key here is that the group develops more in China for China and relies less heavily on central solutions from Wolfsburg. The founding of the new China development unit with the project name “100%TechCo” goes exactly in this direction.
Electromobility in China is growing rapidly, especially in the mass market, however, only with a small participation of the large German car manufacturers. Around every fourth car sold in the Asian country is already electric.
In megacities like Shanghai, the proportion is even greater. In addition, there are digital requirements in infotainment, which the Chinese car manufacturers understand better in their home market than the established international manufacturers such as Volkswagen.
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In the new VW company, the development of vehicles and components is to be merged with procurement. By bundling and integrating local suppliers, “we will significantly accelerate our pace of development,” explains Brandstätter in a statement. In doing so, the group is also strengthening efficiency in its cooperation with VW’s joint venture partners in China, namely SAIC, FAW and Volkswagen Anhui – and increasing profitability.
The new unit is expected to start up in early 2024 and will include more than 2000 procurement and development staff. The company will be headed by Marcus Hafkemeyer, who is currently head of technology for VW in China.
The focus of the new unit will initially be on electric cars based on the MEB platform. The company is expected to play a key role in the development of a future VW model that will be launched in 2024.
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