- Volkswagen Group has confirmed that for the first time, its recent Chinese business expansions now means it is capable of developing and validating a new car model for China whilst being completely separated from its home turf of Germany.
- Through the group’s ‘In China for China’ strategy, the company has now unlocked all the resources to carry out the entire development and validation cycle of a new model using only its Chinese facilities.
- This move allows Volkswagen Group to further benefit from the so-called ‘China Speed’ that has allowed many Chinese OEMs to bring new car models to market at a much more rapid pace than its international rivals.
Volkswagen’s commitment to China gets deeper
Volkswagen Group is now capable of localized, end-to-end development capabilities for the Chinese market, following the opening of its first test workshops in the city of Hefei. This means, for the first time in the group’s history, it can now support the development and validation of new vehicle platforms without input from Germany.
This move will be of significant benefit for the production of the group’s China-specific vehicles, allowing research and development to take place much closer to the final customer. Over the next five years, Volkswagen Group plans to launch 30 EV models within China, highlighting the importance of this new localized development strategy. Outside of China, this move is also set to position Volkswagen as a global player within automotive technology, with the new end-to-end capabilities allowing the manufacturer to speed up decision-making and accelerate the rollout of new technology such as connected vehicles.
During the announcement, Volkswagen also confirmed that an EV produced in China can be produced for around half the cost as one produced elsewhere, partly aided by utilising these new local development centres and suppliers.
Which other European OEMs are investing in China?
Volkswagen is part of a growing list of European OEMs who are using Chinese facilities and talent to produce models specific for China. However, European OEMs are also investing in China to speed up the development cycle of new models for other markets, whilst reducing costs and increasing innovation.
One example is the recent reveal of the Renault Twingo, a sub-£20,000 city EV which was developed with the help of Renault’s own Chinese development centre. This allowed the Twingo to be the first Renault to have a development cycle of under two years, matching the cycles which Chinese OEMs have already been achieving. For Western automakers to remain competitive with China, this shortening of development cycles is going to be key.
Oliver Blume, CEO of Volkswagen Group, commented on the milestone:
“Our ‘In China for China’ strategy continues to gain momentum. At our development centre in Hefei, China, we have now created all the conditions necessary to develop, test and locally manufacture the next generation of intelligent connected vehicles. This milestone makes us even faster and more efficient – and brings us even closer to our customers. This will enable us, as the Volkswagen Group, to consolidate our position in the world’s largest automotive market with the clear goal of becoming the global technology driver of the automotive industry.”
