Home » Products Sourcing » Vehicle Parts & Accessories » Volkswagen Investing €2.5b in Hefei Production Hub

Volkswagen Investing €2.5b in Hefei Production Hub

Volkswagen's factory

Volkswagen is further expanding its production and innovation hub in Hefei, Anhui Province, China with investments totaling €2.5 billion. In addition to the expansion of R&D capacity, preparations are also being made for the production of two Volkswagen brand models, which are currently being developed together with Chinese partner XPENG.

production and innovation hub

Production of the first model, an SUV in the mid-size segment, will begin as early as 2026.

The additional models accelerate the electrification of the Volkswagen Group’s model portfolio in China. By 2030, more than 30 all-electric models of all Group brands will be on offer in China alone.

Volkswagen China Technology Company (VCTC), the Group’s 100% owned subsidiary based in Hefei, is the central unit responsible for product localization and, in close collaboration with the Joint Ventures, has taken on central development tasks. VCTC is also developing the first China-specific electric architecture, the China Main Platform (CMP), on which at least four additional models for the electric entry-level segment in the compact class will be built from 2026.

Today, around 50 million customers in China drive a Group product. The basis for our success is the cooperation with our strong Joint Venture partners, SAIC and FAW. Together, we are now accelerating the transformation towards smart electric mobility. With our ‘In China, for China’ strategy, we have a strong plan and are accelerating the realignment of our business, with more customer focus, more speed and more local development. Our new production and development hub in Hefei will bring technologies to market around 30 percent faster in the future. This additional investment in the site underlines our ambition to quickly expand our local innovative strength.

—Ralf Brandstätter, Member of the Board of Management of Volkswagen AG for China

Over the past four decades, the Volkswagen Group, together with its long-standing Chinese partners SAIC and FAW, has directly aligned its strategy to the needs of Chinese customers. With Santana and Jetta, millions of customers were able to start their individual mobility journey. Later, the first China-specific models, such as Lavida and Sagitar, became million sellers and are still successful in the market today.

The Group launched its electrification strategy in China in 2017. In the same year, China’s first pure Joint Venture for electric vehicles was founded in Hefei, Anhui Province, with the manufacturer JAC. Today, Volkswagen Anhui is the Volkswagen Group’s first majority-owned Joint Venture for cars in China. The site in the eastern Chinese province is the Group’s production, development and procurement center in China and will be expanded into a strategic innovation hub in China, for China.

By building up its own development capacities and partnerships with local high-tech companies, as well as with Chinese manufacturers such as XPENG and SAIC, the Group is not only expanding its product portfolio with additional electric vehicles, but also bringing state-of-the-art local technologies into its models at China Speed. As a result, development times will be reduced by more than 30 percent and products will be tailored entirely to the specific requirements of Chinese customers.

Volkswagen has 39 plants in China, making it an integral part of the country’s industrial ecosystem. Strong partnerships connect the Volkswagen Group with the Chinese high-tech companies Horizon Robotics (autonomous driving functions), ThunderSoft (infotainment) and ARK (user experience). More than 90,000 employees work for the Group in China, making Volkswagen the largest European employer in China.

Source from Green Car Congress

Disclaimer: The information set forth above is provided by greencarcongress.com independently of Alibaba.com. Alibaba.com makes no representation and warranties as to the quality and reliability of the seller and products.

Was this article helpful?

About The Author

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top