Volkswagen will learn from Chinese speed

Berlin, January 16 – In light of the increasing competition for e-cars in China, Volkswagen wants to increase the pace of development. Chinese manufacturers only needed about two and a half years to develop a new vehicle, China chief Ralf Brandstätter said at a media roundtable in Berlin. On average, Volkswagen needs almost four years. “Due to our quality standards, we also deliberately take a little more time, but we can be faster in some areas.” This will be achieved by hiring more developers at Volkswagen and software subsidiary Cariad and by pooling skills at the factory in Anhui province in the south-east of the country. Concepts from Chinese suppliers must be incorporated at an earlier stage of development. “We rely on more local innovations, developed in China for China.”

Europe’s largest car company has been present in the Chinese market for almost four decades and leads the competition in internal combustion engines. In China, Lower Saxony draws in a large part of their profits, which they need for the switch to e-mobility and digitization. The group no longer talks about market leadership, but about wanting to play a leading role in the world’s largest car market. Because the Chinese manufacturers have caught up and are putting massive pressure on their rivals VW, BMW and Mercedes when it comes to electric cars. The market leaders include BYD and the American electric car manufacturer Tesla.

Volkswagen will benefit from the fierce competition. China is “like a giant gym” for the auto industry. “We are consistently adapting to this and accepting the challenge,” Brandstätter said. “We now have to counteract that – also in order to be able to maintain our global position against the Chinese competition in the future.” It affects not only Volkswagen, but the entire German car industry.

VISIT XINJIANG

Brandstätter referred to the Chinese government’s plan to become a leader in networked and autonomous vehicles, so-called Intelligent and Connected Vehicles (ICV). The Chinese car industry benefits from this. Volkswagen would like to be involved in the development. In the debate about excessive economic dependence on China, Brandstätter spoke against decoupling the West from the People’s Republic. “Right now we have to keep in touch. Close economic relations help with this.”

Globally, Volkswagen is currently diversifying its markets to reduce dependencies. The Wolfsburg-based company is investing heavily in North America and also secures part of the raw material requirements for electric cars there. A battery cell factory is also to be built in the region in the foreseeable future. The US is promoting massive tax breaks for renewable energy technologies such as electric cars.

Brandstätter announced a visit to the Chinese province of Xinjiang in February, where Volkswagen operates a factory together with the state-owned company SAIC. The Uyghur Muslim minority, oppressed by the Chinese state, lives in the northwestern part of China. Other companies have been punished by Chinese customers with social media hostilities and boycotts for taking a critical stance on this issue. “We will do everything in our power to ensure that there are proper working conditions at this facility. Just like at any other facility,” Brandstätter said. VW is also checking the supplier network. “We have no evidence of human rights violations or forced labor.”

MODEL RANGE EXTENDED

In order to maintain its position in China, Volkswagen wants to expand the model range upwards and downwards – upwards with the electric Passat ID.7 and downwards with, for example, a small sedan or an SUV below the ID4. An ID.2 in the form currently planned for Europe is not currently planned for China.

For 2023, the group expects the Chinese passenger car market to grow by four to five percent to around 23 million vehicles.

Volkswagen will learn from Chinese speed

Source: Reuters

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