Short dive:
- To celebrate the 40th year of their collaboration, Volkswagen Group and SAIC Motor have agreed to extend their joint venture until 2040, a 10-year addition to the original agreement, according to a November press release.
- SAIC Volkswagen’s “In China, for China” strategy is accelerating electrification efforts thanks to “dynamic market development,” the release said. The joint venture will launch 18 new models by 2030, including eight electric vehicles.
- The companies will also accelerate the transformation of SAIC Volkswagen’s production network, focusing on cost efficiency and productivity, as demand for electric vehicles and competition grows.
Diving information:
According to its interim financial report, Volkswagen Group has faced declining profits in China, its largest single market, due to stiff competition. In the first three quarters of 2024, the company delivered 10% fewer vehicles to Chinese customers compared to the previous year.
As a result, the automaker and its brands aim to bring 40 new models to the Chinese market, half of which will be electrified. It is expected to offer more than 30 electric models on the market by 2030.
SAIC Volkswagen intends to introduce two electric vehicles as early as 2026, built on its new locally developed compact core platform, which uses zonal electric architecture for the first time in Volkswagen Group history, the statement said.
Ralf Brandstätter, Volkswagen AG Board Member for China, said that by continuing to integrate into the innovation ecosystem in China, the automaker ensures that the partnership remains economically and technologically future-proof.
“This also creates a strategic competitive advantage for the Volkswagen Group globally,” he said in the release on the joint venture extension.
Wang Xiaoqiu, president of SAIC Motor, said that electrification and transforming the car into an intelligent vehicle are setting trends in the automotive industry.
“The decisive factors here are consistent customer orientation, quality management and the use of our innovative strength,” he said. “We will break new ground with ‘China Speed.’”
Many of SAIC Volkswagen’s sites are in the process of or have already been converted for electric vehicle production, but the joint venture has also sold some of its sites in the market, including Urumqi, Turpan and Anting, as part of its strategic realignment.
In addition to the partnership with SAIC, Volkswagen has also recently turned to other joint ventures to develop its own EV technology. Last month, Volkswagen launched its joint venture with Riviano — a new company called “Riviano and VW Group Technology” – which will develop the electrical/electronic architecture and software for the vehicles. A VW vehicle has been adapted to run The one from Rivian zonal planning, according to a news release.
It was not specified whether SAIC Volkswagen is tapping the automaker’s other joint venture for its zonal electric architecture.