Volkswagen to invest 1bn euros in China EV centre

[beijingwalker]

Volkswagen to invest 1bn euros in China EV centre​

2023-04-18 HKT 21:18



Volkswagen's Ralf Brandstaetter said the move is a key step in the group's "in China, for China" strategy. File photo: AFP

German carmaker Volkswagen said on Tuesday it would invest one billion euros in a new development centre for electric vehicles in China, as the EV market proved a key battlefield for brands at the Shanghai Auto Show.

"The company is investing around EUR 1 billion in a new state-of-the-art development, innovation, and procurement centre for fully connected intelligent electric vehicles in the southern Chinese city of Hefei," the group said in a news release.

EVs now make up one out of four car sales in China, the world's largest car market, and dozens of new models from domestic and Western brands were unveiled at the auto show, the first since the end of China's Covid restrictions.

Local brands command 81 percent of the EV market in China, according to analysts at Counterpoint Research, and industry titans like Volkswagen are racing to catch up.

Executive Ralf Brandstaetter said the move was a key step in the group's "in China, for China" strategy.

The new venture, called "100%TechCo", will be launched in 2024, and will be made up of more than 2,000 employees working in procurement and research and development.

"The aim is to align the Group's vehicles even more quickly with the wishes of Chinese customers and to achieve shorter time to market," the news statement said.

It said it expected development times to be shortened by 30 percent.

The CEO will be Marcus Hafkemeyer, Chief Technology Officer of Volkswagen Group China. (AFP)

Volkswagen to invest 1bn euros in China EV centre - RTHK

German carmaker Volkswagen said on Tuesday it would invest one billion euros in a new development centre for electric vehicles in China, as the EV mar...

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[beijingwalker]

VW to launch €1bn Chinese innovation centre 100%TechCo​

German carmaker pushes ‘in China, for China’ strategy to address declining share in its biggest market

Patricia Nilsson in Frankfurt
2023-04-18

Volkswagen will spend €1bn on setting up a new innovation centre in China, as the German company seeks to better appeal to the tastes of local consumers in the world’s largest car market where its market share is in decline.

The German carmaker said on Tuesday it would start a company, 100%TechCo, that would employ about 2,000 people and play a “major role” in the development of a future Volkswagen model expected to be launched next year.

VW has long dominated sales of combustion engine cars in China but has lagged behind domestic rivals, most notably BYD, in the rapidly growing category of electric vehicles. Its market share in China was 16 per cent last year, down from 18.5 per cent in 2018.

The declining Chinese position for VW, which has faced criticism for becoming too closely entwined with Asia’s largest economy, is among the biggest problems facing relatively new chief executive Oliver Blume.

Concern has been mounting in Germany over large investments in China by several of its biggest companies, amid soul-searching over how the country found itself so deeply reliant on Russia for energy.

VW, a sprawling group of brands including Porsche, Audi and Škoda, has continued to invest heavily in China despite pressure to reduce its dependency on the country, where it makes nearly half of its profits.

The company unveiled plans last year to invest €2.4bn in a joint venture with Horizon Robotics, one of China’s leading designers of artificial intelligence chips, in a bet that AI-assisted and driverless cars would help it retain market share in its biggest market.

The group also said in recent days it would invest about €10mn in a partnership with Chinese company ThunderSoft to create China-specific features for its in-car entertainment offering.

Ralf Brandstätter, VW’s board member responsible for China, said 100%TechCo was an important step for VW’s “in China, for China strategy”. VW said the new company, to be based in the southern Chinese city of Hefei, would reduce the time needed to develop new products and technologies for China by about 30 per cent.

“Local suppliers will be involved in the early stages of product development in order to integrate the latest technologies and application concepts into new products,” VW said. “In addition, the new company will more closely integrate the development projects of all of the Volkswagen Group’s joint ventures in China.”

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[beijingwalker]

Apple, Tesla, Airbus, Boein... all set up their research centers, China now prefers these high quality research base foreign investments