Volkswagen can now develop cars entirely in China for the first time, marking a strategic shift to compete better in the world’s largest automotive market.
FRANKFURT: Volkswagen can now develop cars from start to finish in China for the first time in its history.
The German automotive giant announced its new test laboratories in Hefei enable complete vehicle development outside Germany for Chinese customers.
This new research centre is Volkswagen’s only facility dedicated exclusively to electric cars.
The Hefei centre will also support exports from China to South East Asia and the Middle East.
“We are taking our development capabilities in China for China to the next level,” Volkswagen China boss Ralf Brandstaetter said.
He added they were strengthening their ability to respond quickly to local needs and shape technologies where they will be used.
German carmakers face intense pressure from local competitors in China’s domestic market.
Chinese carmakers held almost 60% of their domestic market last year, up from 35% in 2019 according to consultancy Jato Dynamics.
Volkswagen CEO Oliver Blume told reporters in September that producing most cars in Germany for global export “doesn’t work anymore”.
He confirmed their new strategy focuses on “in China for China” operations.
The company said some model development aspects can be done in China at half the European cost.
New Hefei facilities could cut vehicle development times by up to 30% compared to Volkswagen’s current Chinese development cycle.
