Volkswagen Group, responding to the competitive pressure from local brands like BYD, announces a new initiative for affordable battery electric vehicles (BEVs). The plan focuses on entry- and mid-level models, specifically designed for the Chinese market.
During the inauguration of the Volkswagen Group China Technology Company (VCTC) in Hefei, an ambitious $1.1bn EV development and procurement hub, the company revealed its ‘China for China strategy’. This approach underscores VW’s commitment to regaining its lost market share in China, which is the world’s largest vehicle market.
Ralf Brandstaetter, CEO of Volkswagen China, highlighted that the new platform, dubbed the A Main Platform, will resonate with the evolving preferences of Chinese consumers, who are increasingly younger, tech-savvy, and seek a digital-rich experience in their vehicles.
The A Main Platform, an evolution of VW’s modular electric drive matrix (MEB) platform used since 2019, will predominantly utilize components from local suppliers. This strategic shift aims to minimize costs and enhance competitiveness in the price-sensitive Chinese market.
Ludger Luehrmann, the chief technology officer at VCTC, pointed out significant cost reductions, like a 37% reduction in dashboard costs achieved by switching from global to local suppliers.
Volkswagen plans to introduce four new models on this platform, targeting the entry- and mid-level segments with prices ranging between $19,600 and $23,800 (CNY 140,000-CNY 170,000). These vehicles will be produced by VW’s primary joint ventures in China, SAIC-VW in Shanghai, and FAW-VW. This initiative complements VW’s collaboration with BEV startup XPeng to develop two new models.
In parallel, VW is set to launch 10 new BEVs globally by 2026, with a reduced time to market, mirroring the efficiency gains in its Chinese operations. This global expansion underscores VW’s commitment to adapting to market demands and maintaining a competitive edge in the rapidly evolving automotive industry.
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