Volkswagen Group has announced an ambitious strategy update for the Chinese market, aiming to strengthen its technological capabilities, reduce costs, and enhance its position as a leading player in the rapidly evolving automotive landscape. At its China Capital Markets Day in Beijing, Volkswagen Group outlined its comprehensive plan, emphasizing its commitment to the Chinese market and its determination to capitalize on the region’s growth potential.
Oliver Blume, CEO of Volkswagen Group, underscored the significance of China as the company’s second home market, highlighting Volkswagen’s robust presence and successful business operations in the region over the past four decades. He reiterated Volkswagen’s commitment to its “In China, for China” strategy, which prioritizes meeting the unique needs of Chinese customers, accelerating product development, and fostering local innovation.
Key elements of Volkswagen’s strategy include:
- Cost Parity and Increased Localization: Volkswagen aims to achieve cost parity with local competitors in the compact car segment by 2026. The company plans to leverage its China Main Platform (CMP) to reduce costs by 40 percent, enhance efficiency, and accelerate time-to-market for new products. By strengthening its presence in the Chinese market and deepening local partnerships, Volkswagen aims to bolster its competitive position and increase its proportionate operating result to around EUR 3.0 billion by 2030.
- Tech Innovation and Partnerships: Volkswagen is committed to enhancing its technological capabilities and driving innovation through strategic partnerships with local tech companies and manufacturers. The company is focusing on digitalization and software development to align its products with market trends and customer preferences. The establishment of the Volkswagen Group China Technology Company (VCTC) in Hefei will streamline development processes, reduce time-to-market, and maximize cost competitiveness.
- Electric Vehicle Expansion: Volkswagen plans to significantly expand its electric vehicle (EV) portfolio in China, launching 40 new models over the next three years, half of which will be electrified. By 2030, Volkswagen aims to introduce more than 30 BEV models to the market, catering to the growing demand for sustainable mobility solutions. The company aims to maintain its leadership position among international OEMs and secure a top-three position in the Chinese market.
Ralf Brandstätter, Member of the Group Board of Management for the China region and CEO of Volkswagen Group China, reiterated Volkswagen’s commitment to profitability and efficiency, emphasizing the importance of a cross-brand efficiency program and consistent cost management.
Volkswagen’s strategic update in China reflects its proactive approach to seizing opportunities in a rapidly evolving market. By prioritizing innovation, localization, and customer-centricity, Volkswagen aims to strengthen its position as a key player in China’s automotive industry while driving sustainable growth and profitability.
