Automotive News Europe — 2024-04-24
Automotive Industry
Volkswagen is betting on investments in a new Chinese research hub, and partnerships with Chinese EV makers and suppliers to develop more affordable EVs, more quickly.
Volkswagen aims to preserve its market share in China at about 15% in 2030, the head of its China business said, betting that heavy investment there will help it maintain its competitiveness against local electric vehicle rivals.
Volkswagen ceded its title of best-selling car brand in China to Chinese EV giant BYD in late 2022, and the group's market share in China fell to 14.5% in 2023 from 19.3% in 2020 as combustion-engine sales declined.
Ralf Brandstaetter, Volkswagen Group's management board member for China, told reporters that Volkswagen was confident it could maintain or slightly increase this share.
He cited investments in a new Chinese research hub, and partnerships with Chinese EV makers and suppliers to develop more affordable EVs, more quickly.
"We want to be the number one international OEM [automaker] in China in 2030 with 15% market share," he said in comments embargoed to coincide with a capital markets event on Volkswagen's China business held by the carmaker on Wednesday, 24 April 2024.
4 million sales
The 15% market share would correspond to selling 4 m cars in China annually by 2030, up from 3.07 m in 2023, it said. In addition, it is targeting proportionate operating profit of more than €2 bn ($2.14 bn) in China in 2027 and around €3 bn by 2030, up from €2.6 bn in 2023.
Volkswagen Group CEO Oliver Blume earlier in April 2024 said the group "cannot keep up at the top of the table at the moment" in China's fast-growing EV market, adding that a market share of more than 10% would be "very respectable" given fierce local competition.
China has undergone a big shift from the combustion-engine age when foreign-made cars, especially those from Germany and Japan, were seen as the pinnacle of global engineering, to the electric age that has seen their Chinese counterparts move much faster on developing EV technology.
VW fights back
Among the incumbent foreign automakers, Volkswagen has arguably mounted the biggest fight to stay competitive against the likes of BYD and US automaker Tesla, including participating in a bruising price war that started in 2023 and has since drawn in more than 40 brands.
Volkswagen's ID.3 became one of the best-selling EVs in China after the automaker slashed the price by just over $5,100.
With its current offerings priced above that of many Chinese electric-only rivals, the German carmaker is pushing to expand its product range in China to attract customers in the entry- and mid-level segment of EVs.
"The price war has victims and we don't want to be a victim," Matthias Glodny, Volkswagen Group China's vice president for products, told reporters at the Tuesday (23 April 2024) briefing. "We're feeling it's not a sustainable way to continue, but, of course, we are fighting back."