“Volkswagen and SAIC are pioneers of individual mobility in China. Together we founded one of the first international joint ventures in the region 40 years ago. Since its inception, SAIC VOLKSWAGEN has earned the trust of more than 28 million customers. With the long-term contract extension, we underline the importance of this cooperation and the importance of the Chinese market for the Volkswagen Group. “We are driving the transformation of SAIC VOLKSWAGEN in line with our ‘In China, for China’ strategy at all levels and will bring a new generation of electrified vehicles onto the road by 2026. In this way, we ensure that our partnership is economically and technologically future-proof,” said Ralf Brandstätter, Volkswagen AG Board Member for China: “China is an innovation driver for autonomous driving and electromobility. With the new agreement, we are intensifying our integration into the Chinese ecosystem.” The consistent use of local innovative strength also creates a strategic competitive advantage for the Volkswagen Group worldwide.”

Wang Xiaoqiu, Chairman of SAIC Motor, said: “Electrification and transforming the car into an intelligent vehicle are the defining trends in the automotive industry. Given the high market dynamics, SAIC Motors, the first Chinese automaker to sell more than one million vehicles in the electric segment and overseas markets, is deepening and expanding its cooperation with Volkswagen. SAIC VOLKSWAGEN’s focus is on developing new, intelligent electric vehicles to maintain an industry-leading position in smart technologies. The decisive factors here are consistent customer orientation, quality management and the use of our own innovative strength. With “China Speed” we will break new ground. The aim of the joint venture is sustainable and steady sales growth as well as a leading market position. In doing so, we are contributing to the continued positive development of the Chinese and global automotive industry.”

The original joint venture agreement ran until 2030. However, due to multi-year new product planning cycles and associated investments, core contracts are typically extended several years before their end date.

With the new agreement, both partners are now creating a strong and timely basis for the successful development of SAIC VOLKSWAGEN beyond 2030. With this in mind, Volkswagen and SAIC have identified three key areas to accelerate the transformation of the SAIC VOLKSWAGEN joint venture with the Volkswagen Passenger Cars and Audi brands:

1.Expansion of the product offensive with new electric models, range extender variants and plug-in hybrids

By 2030, SAIC VOLKSWAGEN will bring a total of 18 new models onto the market. In view of the dynamic market development, the joint venture partners attach particular importance to an accelerated electrification strategy. These include eight new electric models. Two electric vehicles based on the locally newly developed “Compact Main Platform” (CMP) will come onto the market as early as 2026 – equipped with a state-of-the-art zonal electrical architecture that will be used across the group for the first time. In addition, the still highly profitable range of combustion engines will be transferred to the world of electric mobility by 2026 with three plug-in hybrid models and, for the first time, two range extender variants. This will quickly further strengthen the company’s position in the rapidly growing market for fully electric and partially electrified vehicles. At the same time, the new vehicles are consistently tailored to customer needs as part of the “In China, for China” strategy. Of the 18 models that SAIC VOLKSWAGEN will bring to market by 2030, 15 vehicles will be developed exclusively for the Chinese market.

2. Gradual optimization of the production network with a focus on efficiency and productivity

Given the rapidly growing market demand for electric vehicles and increasing competitive pressure, the joint venture partners will also accelerate the transformation of the SVW production network with a focus on profitability and productivity. In this context, the existing production capacities for vehicles with combustion engines will be gradually reduced in the coming years. While many SVW locations are or have already been converted to the production of electric vehicles in accordance with customer demand, alternative economic solutions are being examined in individual cases. This also applies to the joint venture location in Urumqi. For economic reasons, the site has now been sold by the joint venture as part of the realignment. The same applies to the test tracks in Turpan and Anting.

3. Consistent decarbonization initiatives with ambitious goals

As part of the extension of the joint venture agreement, both partners agreed on ambitious decarbonization targets for sustainability. SAIC VOLKSWAGEN wants to reduce its CO2 emissions₂ Emissions by 2030 by 25 percent compared to 2018 and is actively driving forward the transformation to CO2 neutrality at the company level. SAIC VOLKSWAGEN is thus following the group’s goal of achieving CO2 neutrality by 2050. The company is thus positioning itself as a pioneer in decarbonization within the Chinese automotive industry.

SAIC and Volkswagen continue 40 years of success

Over the last four decades, the Volkswagen Group, together with its Chinese partner SAIC, has tailored its strategy specifically to the needs of Chinese customers. The Santana enabled millions of customers to enter the world of individual mobility. Later, the first China-specific models such as the Lavida were introduced, which sold millions of units and continue to achieve great success on the market today. ŠKODA models have also been produced by SAIC VOLKSWAGEN since 2007. The electrification strategy in China was launched in 2017. The ID.3 is currently one of the best-selling pure electric vehicles in the Chinese market and leads the compact hatchback segment.

Group drives transformation with “In China, for China” strategy

As part of its “In China, for China” strategy, the Volkswagen Group is determined to advance its transformation in China. The group is strengthening its local development competencies in the areas of e-mobility, digitalization and autonomous driving. This involves both increased cooperation with Chinese partners and the consistent expansion of our own additional development capacities. A key role in this context is played by the new development and innovation center in Hefei, where around 3,000 developers are working on the next generation of fully connected, intelligent electric vehicles. This also accelerates the Group’s decision-making and development processes in the region and contributes to shortening the development cycles of new products by 30 percent. This allows the company to react more quickly to market-determining trends in China and to make optimal use of the market’s growth dynamics.

In the next three years alone, the group and its brands will bring 40 new models onto the Chinese market, half of which will be electrified. By 2030, the group will offer more than 30 electric models in China.