Volkswagen Group Presents Overhauled China Strategy

Volkswagen Group China CEO Ralf Brandstätter outlines the company’s latest new-model plans, announcing it intends to offer up to 30 different battery-electric vehicles in the world’s largest auto market by 2030.

The plans, revealed to media representatives at a presentation in Beijing, form a central part of Volkswagen Group China’s new “Target Picture 2030” strategy to develop and produce a greater number of models exclusively for sale in the Chinese market as an extension to the “In China, for China” initiative unveiled in 2023. 

Set to include Chinese market-only BEV platforms and models together with a brace of new electrified internal-combustion-engine models – all featuring software solutions tailored specifically to Chinese-market regulatory and user case scenarios – the plans encompass models from the VW, Audi, Cupra and Škoda brands as well as the Chinese-market-only Jetta brand (pictured, below). 

The plans also include Chinese sales operations for the Bentley, Bugatti and Lamborghini brands.

2024 marks the 40th anniversary of VW Group operations in China. Brandstätter says the new strategy lays the foundations to ensure it will remain the leading international automaker in China.

Despite challenging market conditions with widespread discounting to entice buyers, it sold 3.24 million vehicles in China in 2023, representing 35.1% of its 9.24 million global sales last year.

Included was a 23.2% increase in BEV sales at 191,800 units, some 24.9% of its 771,100 global BEV sales. 

The VW Group’s share of the Chinese ICE market also grew by 1.3%, according to official figures released by the company.

This compares to the VW Group’s North American sales of 990,000 in 2023. 

Together with the 30 new BEV models planned for sale by 2030, VW Group China is preparing to launch 30 new ICE models by 2027, Brandstätter, the former CEO of the VW brand’s global operations, confirms to WardsAuto.

The renewed focus on ICE models is a recognition of VW Group China’s continued strength in traditional Chinese market segments, particularly in third- and fourth-tier Chinese cities, where sales of BEVs are yet to reach the level of popularity seen in more affluent and electric vehicle infrastructure-rich first- and second-tier Chinese cities.

Among the initiatives planned to extend the popularity of VW Group China’s ICE models are new mild-hybrid electric vehicle and plug-in hybrid-electric vehicle drivetrain options. 

New ICE models for 2024 include the new third-generation Tiguan L Pro, ninth-generation Passat, fourth-generation Magotan, facelifted Polo and a new, yet-to-be-named A-segment  utility vehicle.

In a renewed challenge to domestic Chinese brands such as BYD, Changan, Geely and Dongfeng Motors, Brandstätter says VW Group China is planning a comprehensive technical upgrade of all its new ICE models to bring them into line with its new BEV models, including developments such as Level 2+ Advanced Driver Assistance Systems functionality, with automated driving covering highway and urban scenarios and automated parking.

VW Group China operates two long-standing joint ventures with Shanghai Automotive Industry Corp. (SAIC) and First Automobile Works (FAW) in China. Established in 1984 and 1991, respectively, they produce both BEV and ICE models for the VW, Audi, Skoda and Jetta brands. 

In 2017, it established a third joint venture with JAC Motors to manufacture BEV models for the SEAT-operated Cupra brand. It operates under the name Volkswagen-Anhui (VW-A). 

As part of an acceleration of its BEV plans in China, the VW Group entered into a cooperative agreement with Shanghai-based IM Motors, an electric vehicle start-up backed by SAIC, Alibaba and Chinese technology company Zhangjiang Hi-Tech, in 2023. It also purchased a 5% stake in Guangzhou-based Xpeng Motors for $700 million. Both partnerships aim to develop and produce BEV models for VW Group brands for the Chinese market.

Under the “Target Picture 2030” strategy, Brandstätter says VW Group China will commit even more heavily to the transformation to BEVs across its lineup, with 10 models planned to be offered by the end of 2024 and up to 20 planned by the end of 2027.

By 2030, it plans to offer 30 BEVs based on up to six different platforms, including those from IM Motors and Xpeng.

The most prominent of VW Group China’s new BEVs planned for sale in China in 2024 is the ID.7 (pictured, below), the first dedicated electric model from the company to compete in the lucrative midsize sedan class. Based on the VW Group’s Modular Electric Toolkit (MEB) platform, it will be produced at both the FAW-VW and SAIC-VW joint ventures in factories in Changchun and Anting.