Joint ventures cement Volkswagen’s top position in Chinese market
Volkswagen, the best-selling international brand in China, is consolidating its position in the country with increased localization efforts ranging from tailor-made models to cooperation with Chinese partners.
“The Volkswagen brand can proudly look back on 40 years of success in China and carry this success story into the new mobility era. We are ushering in a new era of mobility in China, together with all our Chinese partners,” said Thomas Schaefer, Volkswagen Brand CEO.
Volkswagen has lived up to its name in China as the “people’s cars”, with tens of millions of vehicles on Chinese roads now and forming childhood memories for many over the past decades.
SAIC Volkswagen, a joint venture established with Shanghai-based SAIC Motor in 1984, is the oldest extant automotive partnership in the country.
It later established car-producing partnerships with FAW and JAC, which are headquartered in Northeast China’s Jilin province and East China’s Anhui province.
As the automotive sector is shifting toward electrification and local brands including BYD and Geely are rising, Volkswagen is revving up efforts to offer models that meet the demands of local tech-savvy customers.
“Our sharpened China strategy is based on three pillars: a comprehensive product portfolio, a new China-specific DNA and local technical development with strong Chinese partners to accelerate the pace of innovation,” said Schaefer.
The commitment of the German brand is clearly shown at the ongoing Auto China that runs to May 4 in Beijing.
It is presenting a diversified portfolio of 17 models, both electric vehicles and gasoline ones. Of them is the ID. Code, developed jointly by teams in China and Europe, specifically for customers in China.
The model is capable of Level 4 autonomous driving. Its clear and fluid exterior also functions as a projection surface for next-generation AI-assisted light and display systems.
Volkswagen said the forward Volkswagen looking design language of the new China DNA will be interpreted for adoption by all three of its joint ventures — SAIC Volkswagen, FAWand Volkswagen Anhui — to address the evolving needs of Chinese customers.
Another highlight is the new progressive category — ID. UX — which is designed specifically for China as an extension to the all-electric ID. family.
Developed and built at Volkswagen’s intelligent connected vehicle hub in Anhui, a standout feature for all ID. UX models will be the distinctive gold Volkswagen logo, symbolizing confidence in self-expression to “make every moment gold”.
The carmaker said the first ID. UX model — the ID. Unyx — will hit the roads later this year.
The ID. family will grow to a total of 16 models by 2030. This includes five models from the new ID. UX category, which are to debut by 2027.
Volkswagen is also introducing electrified versions of its internal combustion engine models step-bystep and expanding its portfolio in China with new and highly-efficient plug-in hybrids that have an electric range of more than 100 kilometers.
Stefan Mecha, Volkswagen Brand China CEO, said that although EVs are the future, the demand for plugin hybrids is still big in China, so such vehicles have an important position in the brand’s lineup in China.
To meet the evolving demands of Chinese buyers better and faster, the carmaker is coming up with a China-dedicated EV platform, called the China Main Platform.
At least four additional models for the electric entry-level segment are to be built on the platform from 2026, said the carmaker.
Hefei-based Volkswagen China Technology Company is working on the platform. The R&D facility, which is Volkswagen’s largest outside Germany, can bring technologies to market around 30 percent faster.
Multiple platforms enable Volkswagen to offer Chinese customers the right products in all relevant segments and to meet all needs.
Volkswagen is also codeveloping an electrical/electronic architecture with Chinese startup Xpeng in an effort to improve its competitive edge in the country’s heated EV market.
The architecture, which will be available in 2026, will ensure the rapid expansion of digital services in the Volkswagen brand’s Chinaspecific vehicles, thus improving the allure of the German carmaker’s products.
Volkswagen is codeveloping two models with Xpeng as well. Production of the first one, a mid-size SUV, is scheduled to start from 2026.
“We believe we have identified all the right ingredients to be perfectly positioned for the journey ahead,” said Mecha.
“We are executing our plans at ‘China speed’, with a strong product portfolio of around 35 intelligent new models across all powertrains and in all relevant segments by 2030,” he added.
The Volkswagen brand’s success is crucial to Volkswagen Group’s sales in China.
The group announced last week that it expects to see its sales to rise to 4 million by 2030.
That goal would mean a 15 percent share of the Chinese market and a 23 percent rise from the carmaker’s 2023 sales in the country. In that year, it delivered 3.24 million vehicles in China, its largest single market across the globe.
We are executing our plans at ‘China speed’, with a strong product portfolio of around 35 intelligent new models across all powertrains by 2030.”
Stefan Mecha, Volkswagen Brand China CEO