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In the future, Volkswagen wants to rely more on Chinese suppliers in the highly competitive automobile market in China and thus protect itself from international crises. VW Group’s China board member Ralf Brandstätter said in the eastern Chinese city of Hefei that political sanctions are a challenge for international manufacturers in China and that crises such as those in Ukraine or the Middle East are affecting the economy.
According to him, the Wolfsburg-based company therefore wants to produce “in China, for China”. “We strive for an autonomous, controllable value chain,” he explained. Volkswagen now wants to rely on local suppliers in China to avoid being too dependent on imports or exports.
But there is more behind this than political uncertainties. Still strong in the internal combustion engine segment, the Wolfsburg-based company has to gain ground in the electric car market in the world’s second-largest economy because Chinese manufacturers have overtaken Volkswagen here: above all BYD, which sells significantly more. Electric vehicles in China.
That’s why Volkswagen decided to expand its location in the provincial capital Hefei, almost 500 kilometers west of Shanghai, characterized by numerous residential towers.
Within 2.5 years, the people of Wolfsburg have built new production and development buildings in the city of nearly eight million people, where previously there was only an empty car park. “In a dynamic market environment, fast-paced development is vital for competitiveness,” said Brandstätter.
This means that e-car buyers in China have different requirements than in Germany because, according to VW, they are significantly younger, with an average age of 34, and their driving habits are also different. In China’s major cities, drivers spend a lot of time in traffic jams. So fun is more important than lots of horsepower.
But it won’t be that easy: Brandstätter expects, in his words, “a very aggressive price level.” In addition to large manufacturers, the Chinese electric car market also hosts many small brands that are little known in Germany.
Xpeng is one of them. VW cooperated with southern Chinese to acquire new customers. Industry observers predict that especially smaller competitors will not be able to withstand the price war and many brands will disappear.
Brandstätter and his executive colleagues like to talk about “China’s speed.” For VW, this means that the group needs to be faster in developing models and adapting to customer requirements.
The Wolfsburg-based company wants to introduce 30 new electric car models to the Chinese market by 2030. Key to this is the Volkswagen China Technology Corporation (VCTC) in Hefei, which in short is shifting the development of models for the Chinese market from Wolfsburg to China, thus shortening the time until vehicles and components are ready for the market. It needs to be 30 percent.
The group invested approximately one billion euros. By the end of 2024, around 3,000 people are expected to work here, developing models for three joint ventures (partnerships between VW and Chinese companies).
Volkswagen China expects a significant cost reduction by focusing on Chinese suppliers. Why did Wolfsburg decide to do this now? “We learned that you can’t do this from 8,000 kilometers away with only a six-hour time overlap,” said Marcus Hafkemeyer, VW manager for research and development in Hefei.
So far, every platform, the vehicle infrastructure so to speak, has been developed and transferred to Germany for China. To save development costs and time, this will now be done in Hefei.
It is also said that for Volkswagen, Chinese suppliers have only been able to grow and offer the quality that VW needs in the last three to four years.
(SDA)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
