Volkswagen: Why the Group Needs China Speed for E-Cars

Volkswagen sold 3.2 million vehicles in China in 2022, four percent fewer than in 2021, marking the lowest sales in ten years. These numbers are alarming for the group, given that the overall market grew by two percent to 21 million vehicles. The reasons also lie in the strengthened Chinese competition, which has closed and in some cases even surpassed previous gaps in electrification and digitization. Chinese manufacturers develop a new car in two and a half years, while VW takes just under four years, complained the new China chief Ralf Brandstätter, who was appointed in August, in the Süddeutsche Zeitung - and demanded "China-speed" from his own company.

He wants to eliminate the deficits and get VW back on track in China. He explained to the SZ that it is mainly the size of the market and the innovative strength that make it necessary to stay in China. Here, digitization with the subtopic of automation of driving functions and infotainment is being advanced, which is a "must-have." Additionally, technological standards are increasingly decoupling, requiring the development of a car "in China for China." A European car can no longer simply be transferred to China.

Therefore, a second company headquarters will be established in eastern China's Anhui, including a regional research center for the development of electric cars for China. Partnerships, such as the recently launched one with Horizon Robotics, a specialist in autonomous driving systems, are to provide support. Two billion euros are to be invested here, and the number of developers doubled.

Compared to the market giant BYD, VW is hopelessly lagging behind in electric cars: BYD reported 1.9 million deliveries, Tesla 440,000, while VW languishes at 150,000. In general, the situation of German manufacturers in China is highly tense, reports the Süddeutsche Zeitung, citing automotive economist Stefan Bratzel, who recently studied the market for his CAM. He also noted that Chinese manufacturers are increasingly successfully pushing into the European market, with high-quality products such as Nio or MG proving their worth. And it seems as though the Chinese brands have only just begun.