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Volkswagen Group CEO Oliver Blume (Oliver Blume) will join a high-level German delegation led by German Chancellor Olaf Schultz to visit China in November, Bloomberg reported. Volkswagen did not comment on the news.

Herbert Diess left office on Sept. 1, with current Porsche CEO Oliver Blume taking over as CEO of Volkswagen Group. Data show that Oliver Blume joined Audi in 1994 and has been holding important positions in Audi, Seattle, Volkswagen, Porsche and other brands since then.

Industry insiders believe that the move is intended to reverse Volkswagen's passive situation in the Chinese market and promote the development of Volkswagen electrification with the help of the popularity of China's electric car market. Volkswagen's global sales fell 6 per cent year-on-year to 8.58 million vehicles in 2021, with sales in China falling 14 per cent to 3.3 million vehicles, according to the data. In the first half of 2022, Volkswagen's global sales fell 22.2 per cent year-on-year to 3.875 million vehicles, of which sales in China fell 20.5 per cent to 1.47 million vehicles. Even so, the Chinese market is still Volkswagen's largest single market in the world. Volkswagen China has a 38% market share in the global market, meaning that for every 100 Volkswagen models sold in the world, 38 of them are from the Chinese market.

China, the world's largest auto market, has always been the most important market for Volkswagen, and with the wave of new energy and intelligence in China's auto industry, Volkswagen is also speeding up its layout at home. On the basis of SAIC-Volkswagen and FAW-Volkswagen, Volkswagen reached a joint venture with Jianghuai Automobile in 2017 and established Jianghuai Volkswagen with a share ratio of 50:50, which is a joint venture factory dedicated to the research, development, production and sale of pure electric vehicles. In 2020, Volkswagen increased its investment, and VW China took a stake in Jianghuai Automobile holding shareholder Jianghuai Holdings, 50% each with Anhui SASAC, and increased its stake in Jianghuai Volkswagen to 75%. Then JAC changed its name to Volkswagen Anhui.

At the same time, Volkswagen also began to establish a local new energy vehicle supply chain system. In the most critical area of power batteries, Volkswagen China completed its stake in Guoxuan Hi-Tech in 2021, and its current stake has increased to 26.47%, making it the largest shareholder in Guoxuan Tech.

The former Volkswagen Group CEO Deiss attached great importance to its performance in the Chinese market, criticizing the German government for seriously underestimating the impact of the Chinese market. Half of the 20, 000 to 30, 000 Volkswagen R & D staff in Germany work for Chinese customers, he said. He also said Volkswagen must change the way it sells electric cars in China to deal with its poor sales of electric vehicles in the world's largest car market.

The announcement of Mr Deiss's departure came a day after he talked on Weibo about two major challenges for Volkswagen in the Chinese market. He said that in the entry-level market, cost optimization is being carried out, and the high-end market should focus on developing driving-assisted systems and intelligent Internet connection technology that adapt to the current mobile travel ecology in China, continue to expand CARIAD's R & D capabilities in China, and consider acquiring excellent local software companies.

In recent years, many German enterprises have been increasing their investment in China. According to data released by the German Economic Research Institute, German investment in China reached an all-time high of about 10 billion euros in the first half of the year. In July, German auto parts maker Hella announced that it would expand its production capacity in China and build a new plant in Changzhou, Jiangsu Province. In June, BMW Group officially opened a new plant in Shenyang at a cost of 15 billion yuan, which is also BMW's largest single investment in China.

On the 11th of this month, German Chancellor Schultz expressed his opposition to "decoupling" when attending a meeting, stressing that "decoupling would be a completely wrong path." Schultz also said that not only can Germany and the EU "decouple" from individual countries, but also "must trade with many countries, including China, with emerging countries in Asia, Africa and Latin America."

Industry insiders said that in the trade relations between China and Europe, China is currently Germany's largest trading partner, but Germany's trade weight with China is not high by comparison, which means that if Germany is forced to "decouple" from the Chinese economy, it will seriously affect Germany's current unstable economic foundation, further deepen its risk of economic stagflation, and will do no harm but no good to maintaining the political and economic stability of the EU and improving the well-being of the people.

CARIAD, a software company owned by Volkswagen Group, announced a joint venture with Horizon on Oct. 13 to speed up the development of advanced driving assistance and autopilot systems for the Chinese market. It has been revealed that Volkswagen plans to invest about 2.4 billion euros (16.8 billion yuan) in the partnership, and the deal is expected to be completed in the first half of 2023. "this is the largest single investment since Volkswagen entered China 40 years ago," said Baird, CEO of Volkswagen Group (China). It said that China is the group's most important business region in the world, and the cooperation with Horizon is the core cornerstone of the group's strategic transformation in China and strengthening its business in China. Local R & D will give the group more autonomy and further consolidate its leading position in the Chinese auto market.

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