Volkswagen Group has unveiled an ambitious new strategy for the Chinese market under the theme “In China, for China.” The plan is to significantly enhance value creation locally, align closely with Chinese consumer demands, and solidify its position as a leading international automaker by 2030.
Local Focus and Technological Advancement
With a clear focus on adapting to local market conditions, Volkswagen intends to intensify its in-house development and software capabilities, while also strengthening local partnerships. This approach is aimed at creating innovative products that incorporate state-of-the-art technology, tailored specifically for Chinese customers.
Cost Reduction Initiatives
Central to Volkswagen’s strategy is achieving cost parity with local competitors. The company plans a 40% cost reduction by leveraging its newly developed China Main Platform (CMP) for battery electric vehicles (BEVs) in the compact segment. This platform, developed with contributions from partners like XPENG, will play a crucial role in reducing production costs and enhancing competitiveness.
Expanding Market Presence
By 2030, Volkswagen aims to boost its operating results significantly, projecting earnings of approximately EUR 3 billion, inclusive of results from its Anhui joint venture. The strategy also emphasizes the importance of the combustion engine business, which will provide a profitable foundation as the company transitions toward producing intelligent connected vehicles (ICVs).
Innovative Product Pipeline
Volkswagen is poised to tap into new profit avenues through a dedicated portfolio of hybrid and fully electric vehicles, catering to the dynamic NEV market. The company plans to introduce about 40 new models in China over the next three years, with half of them being electrified, and at least eight BEV models designed specifically for the Chinese market.
Leadership Comments
Oliver Blume, CEO of Volkswagen Group, highlighted China’s strategic importance, referring to it as their “second home market.” He emphasized the systematic advancement of their localized strategy to meet growing market demands and strengthen customer relationships. “We are pushing the boundaries on technological innovation, enhancing cost-efficiency, and deepening our partnerships locally to maintain our competitive edge,” said Blume during the China Capital Markets Day in Beijing.
Future Projections and Goals
With a target to sell approximately 4 million vehicles in China by 2030 and capture about 15% market share, Volkswagen is also focusing on increasing the proportion of electric vehicles sold. The aim is that every second vehicle sold by 2030 will be an electric model, reflecting the company’s commitment to sustainability and innovation.
Volkswagen’s renewed strategy for the Chinese market sets a bold roadmap for growth and market leadership. By localizing development, collaborating with Chinese tech companies, and focusing on cost-effective innovations, Volkswagen is well-positioned to leverage the potential of one of the world’s largest automotive markets.
