AutoBeta(AutoBeta.net)05/31 Report--

On the evening of May 30, Volkswagen Group (China) and Hefei Economic Development Zone jointly signed an agreement to announce that the project of Volkswagen (China) Technology Co., Ltd. will be located in Hefei Economic Development Zone. It is understood that the newly established company has a total investment of nearly 1 billion euros and integrates vehicle research and development, parts development and procurement functions. It is also Volkswagen's largest technology and innovation center in the domestic market. The company is expected to be officially operational in the first quarter of 2024, with about 3000 employees.

Volkswagen Anhui vehicle Manufacturing Base

Volkswagen Group (China) said that this move is a specific measure to actively embrace the electrified and intelligent transformation of the automobile industry, strengthen the group's market position in China, and implement the strategy of "in China, for China". It will further strengthen the group's competitiveness in the Chinese market and better meet the needs of Chinese consumers by speeding up product development and enriching the product lineup.

It should be noted that only two days ago, Volkswagen Group (China) announced a high-profile investment in Hefei, with a total planned investment of about 23.1 billion yuan.

On May 28th, at the launching meeting of the series of activities of "investing in Anhui", Haryogan, chief financial officer of Volkswagen Group (China) Volkswagen Anhui, said that Volkswagen Anhui will continue to invest in Hefei, Anhui, with a total planned investment of 23.1 billion yuan. the total investment in fixed assets between the production base (phase I) and the R & D center is 14.1 billion yuan, and the total investment in research and development before the model is on the market is about 9.05 billion yuan.

In addition, at the Shanghai International Auto Show in April this year, Volkswagen Group also announced that it would spend about 1 billion euros to set up a new wholly-owned company in China, which will be located in Hefei. Marcus Hafkmeier, chief technology officer of Volkswagen Group in China, is the chief executive officer. With the establishment of the new company and its later operation, the development cycle of Volkswagen's new products and technologies will be greatly shortened by about 30%.

According to reports, the new company will not only integrate the group's R & D functions of complete vehicles and spare parts in China, but also include 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. 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.

With the establishment of the new company, Volkswagen may be able to lay out the new energy industry chain in the Chinese market in a faster and more localized way. However, with the transformation of the new energy car market, even as an established brand of automobile manufacturing, Volkswagen's life in China has not been easy.

China, as the largest single market of Volkswagen Group, is facing more and more severe market challenges, so it is understandable that Volkswagen chooses to increase investment in the Chinese market. So, why did Volkswagen Group choose to invest heavily in Anhui?

Auto Industry concern has previously reported that the reason why Volkswagen Group has invested heavily in Volkswagen Anhui is related to the current changes in China's electric car market and the performance of Volkswagen Group's electric vehicle sales in China. Compared with the new power car companies in China, Volkswagen, as an established brand, is relatively conservative in the new energy market, but as the domestic new energy market has become the main market of the automobile industry, Volkswagen, which is short of products in the field of new energy, is also under great pressure, facing the current situation that the market share of joint venture brands is constantly eroded by domestic local brands. Volkswagen wants to carve up more share of the world's largest new energy vehicle market and quickly launch competitive new energy products or the only way out.

It should be noted that at present, Volkswagen Group has two joint ventures in China, FAW-Volkswagen and SAIC-Volkswagen, as well as two major factories in Shanghai Anting and Foshan, Guangdong, but it is different from FAW-Volkswagen and SAIC-Volkswagen. Volkswagen Anhui is the third automobile production base in China after the Anting plant in Shanghai and Foshan in Guangdong, but Volkswagen Anhui only focuses on the R & D and production of new energy vehicles in China. At the level of technology research and development, more attention should be paid to vehicle networking technology, including infotainment technology, advanced assisted driving and self-driving technology. In addition, compared with the first two major factories, Volkswagen Anhui's supply chain and R & D system integration and collaboration is more integrated.

According to the industry, Volkswagen Anhui will integrate the MEB factory, R & D center and some parts suppliers in one park, which can better shorten the product development cycle and speed up the launch of new cars. Earlier, Volkswagen Group said in a press release: "the establishment of the new company 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. "

In addition, although the Chinese market is Volkswagen Group's largest single market in the world, Volkswagen is also under tremendous sales pressure. The first ID since the end of 2020. ID that Volkswagen is selling in China since the introduction of electric cars into China. Family models include ID.3, ID.4CROZZ, ID.4X, ID.6CROZZ and ID.6X, but data show that Volkswagen Group delivered 21500 pure electric vehicles in China from January to March 2023, down 25.4% from the same period last year. In contrast, competitor BYD, which sold 264600 pure electric models in the first three months of this year, has a wide gap.

On a conference call with Volkswagen's first-quarter earnings report in 2023, Arno Antlitz, chief financial officer and chief operating officer of Volkswagen, said that Volkswagen had a slow start in the Chinese market, especially in the pure electric car market, where it needed to catch up with competitors, including BYD. In addition, Volkswagen has high hopes for the prospect of setting up a new company in China. Obom, chairman of the management board of Volkswagen Group, said in an interview with the media that Volkswagen set up the company because it saw the rapid development of the Chinese auto market. Volkswagen hopes to run faster and faster in the new track competition like an athlete.

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