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At the Shanghai International Auto Show, the German Volkswagen Group announced that it will set up a new company in China, focusing on the R & D, innovation and procurement center of intelligent network-connected electric vehicles, which will be located in Hefei. It is understood that Volkswagen Group plans to invest about 1 billion euros in the establishment of the new company, the new company project name is "100%TechCo", the future will cover vehicle development, parts development and procurement functions, the company is expected to be put into operation in early 2024.

Obom, chairman of the management board of Volkswagen Group, said in an interview with the media: "this company will be 100% controlled by Volkswagen." As for the reasons for setting up a wholly-owned new company in China, Obermu said bluntly that Volkswagen set up the company because it saw the rapid development of China's auto market, and Volkswagen wanted to run faster and faster in the new track competition like athletes.

Judging from the contents of the press release issued by Volkswagen Group, the "100%TechCo" project not only integrates the group's R & D functions of vehicles and spare parts in China, but also includes procurement functions. In the future, local suppliers will be able to participate in the early process of product development, integrate the most advanced technologies and applications into new products, and make vehicle models more agile to respond to the needs of Chinese customers.

Referring to the establishment of the new company, Baird, Managing Director of Volkswagen Group and Chairman and CEO of Volkswagen Group (China), said: "the establishment of 100%TechCo is an important milestone in the implementation of Volkswagen Group's strategy of'in China, for China'. By closely linking R & D and procurement capabilities, and working with local high-tech companies in the early stages of development, we will significantly accelerate the development of smart electric vehicles. This will also further enhance the efficiency of our cooperation with the joint venture while optimizing profitability. "

According to the official plan, the new company will be operational in early 2024, with Han Hongming, chief technology officer of Volkswagen Group (China), as CEO of the new company. At the same time, the company will have more than 2000 employees in procurement and R & D in the future, and the product development cycle will be gradually shortened by about 30 per cent. Han Hongming revealed that the first step of 100%TechCo will co-ordinate the development of Volkswagen Anhui MEB platform models and be responsible for the development of platform functions and modules that focus on electric travel and meet the needs of the Chinese market. The new company will play a key role in the development of new models that the Volkswagen brand plans to launch in 2024.

According to the plan, through the new company, the joint venture R & D projects of SAIC-Volkswagen, FAW-Volkswagen and Volkswagen Anhui in China will achieve closer coordination. At the same time, the new company will divide powers and responsibilities with CARIAD, establish a cooperation mechanism, and give play to synergy. According to Automotive Industry concern, CARIAD is a software company of Volkswagen Group. In October 2022, Volkswagen Group announced a joint venture between software company CARIAD and Horizon to speed up the development of Volkswagen Group's advanced driving assistance system and autopilot system for the Chinese market. In April, CARIAD also established a new partnership with China Cochuangda, a provider of smart operating system products and technologies, in an attempt to accelerate the research and development of Smart Internet and infotainment systems in China.

According to the official website, Volkswagen Group, founded in 1938 and headquartered in Wolfsburg, Germany, is the largest car company in Europe and one of the first foreign car companies to enter the Chinese automobile market. it owns Volkswagen, Audi, Skoda, Porsche and other well-known brands, and has invested in joint ventures in China, including FAW-Volkswagen, SAIC-Volkswagen, Volkswagen Anhui and other joint ventures. Obom once revealed: "China is the most important market for Volkswagen Group."

Whether it is the establishment of a new company in China or a previous joint venture with Horizon, Volkswagen Group has made a series of actions to deepen the Chinese market.

According to the China Automobile Association, China's automobile production and sales in 2022 were 27.021 million and 26.864 million respectively, an increase of 3.4% and 2.1% respectively over the same period last year. The total volume of automobile production and sales has ranked first in the world for 14 consecutive years. In other words, China has become the world's largest automobile market. Volkswagen is the first foreign car company to enter the Chinese automobile market. before 2021, SAIC Volkswagen and FAW-Volkswagen ranked among the top three in China's passenger car market for 40 years in a row. Santana, Jetta, Passat, Golf and other models have also become household names. Data show that Volkswagen's global sales fell 6 per cent year-on-year to 8.58 million vehicles in 2021, with Chinese sales falling 14 per cent to 3.3 million vehicles. Even so, China remains Volkswagen's largest single market in the world.

However, with the changes in the domestic car market, a number of traditional car companies are also under great pressure, including Volkswagen. Chinese brand BYD became the top seller of domestic passenger cars with 1.805 million vehicles in 2022, ending the 40-year dominance of joint ventures such as North and South Volkswagen, according to data.

Volkswagen sold 8.2826 million new cars worldwide in 2022, down 7.0% from a year earlier, and was once again overtaken by Toyota to an 11-year low, according to official figures from Volkswagen Group. Of these, Volkswagen delivered 3.1845 million new cars in the Chinese market, down 3.6% from the same period last year, but China is still the largest contributor to the group's global pure electric vehicle sales growth, with Volkswagen delivering 155700 pure electric vehicles in China in 2022, up 68.2% from a year earlier.

During the Shanghai International Auto Show from April 18 to 27, 2023, Volkswagen Group will unveil 20 electric models and other blockbuster models of its brand, including Volkswagen brand ID.7 and the new Porsche Cayenne. At present, Volkswagen Group is accelerating the transformation of electrification in China. According to the plan, Volkswagen Group's brands, including Volkswagen and Audi, will offer more than 30 pure electric models in China by 2030. "with its strong innovation vitality, China is becoming an important leader in the global automotive industry," Obermu said. In order to make more efficient use of the development momentum and innovation speed of the Chinese market, we are significantly speeding up the localization decision-making and development process. Our strong position in the Chinese market will enhance our global competitiveness. " Data show that German cars accounted for 21.0% of China's auto market in 2022, second only to Chinese brands.

"Volkswagen Group will continue to invest in China, otherwise it will lose competition in three years," Ralf Brandstaetter, chief executive of Volkswagen Group China, said in an interview.

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