Volkswagen Group accelerates innovation "in China, for China": Volkswagen (China) Technology Co., Ltd. will launch an electric vehicle platform for the entry-level market within three years

[November 24, 2023, Beijing/Hefei] Volkswagen Group is systematically strengthening its R&D capabilities "in China, for China" and expanding its presence in Hefei to build it into an advanced production, R&D and innovation center. Volkswagen (China) Technology Co., Ltd. is at the core of this strategy. As the largest R&D center of Volkswagen Group outside its headquarters in Germany, the technology company focuses on the R&D of intelligent connected vehicles and is committed to shortening the time to market for automobile and component products by 30% through efficient product development processes and the application of cutting-edge technologies. In this way, the Group will better utilize the growth momentum of the Chinese market. The Hefei center will undertake key development tasks for the Group, including the development of a local electric vehicle platform for the entry-level market. The new platform is derived from the Group's MEB platform and aims to further develop China's market segments. From 2026, the Group will use this platform as a basis to develop pure electric models tailored specifically for the needs of Chinese customers. The development cycle of the platform is only 36 months, which is about one-third shorter than the previous platform development cycle of Volkswagen Group.

"Through the 'In China, for China' strategy, we are fully integrating into China's industrial ecosystem to more quickly develop and manufacture products that meet the needs of Chinese customers," said Bernard Barrede, managing director of Volkswagen Group's China business. "In a dynamic market environment, rapid development is the key to maintaining competitiveness. Volkswagen (China) Technology Co., Ltd. in Hefei is an important interface for us to connect with joint ventures and local partners. In this way, we can make all decisions about Chinese products directly in China and quickly bring them to market. This allows us to improve efficiency, accelerate development, and optimize cost structure."

The electric vehicle platform dedicated to the Chinese market will improve profitability and competitiveness through 100% localized development

Adhering to the "In China, for China" strategy, Volkswagen pursues full localization in both development and procurement to create the first electric vehicle platform dedicated to the Chinese market. The platform will adopt battery, electric drive and motor solutions for the Chinese market to ensure efficiency and rapid market entry. Through cooperation with Xiaopeng Motors, the group's product portfolio in China has expanded to the mid-size car market, and will further expand its product lineup to the entry-level market in the future.

"As the Group advances the development of an electric vehicle platform for China's entry-level market, we will undertake more important development work 'in China, for China'," added Bared. "We will bring the new platform to market within 36 months, which means its development cycle will be shortened by about one-third, while enabling us to quickly develop new customer groups in the vibrant Chinese electric vehicle market. To this end, we will give full play to the key role of Hefei as the Group's technical center."

Optimize organizational structure and improve cooperation efficiency

The advanced production, R&D and innovation center established in Hefei is a key pillar of the group's "In China, for China" strategy. This center will help the group grasp the decisive trends in the Chinese market as early as possible and better utilize the growth momentum and innovation strength of the Chinese market to promote its own development. Another key pillar of the strategy, Volkswagen Anhui, is scheduled to go into production in the coming weeks. In addition, Volkswagen (Anhui) Components Co., Ltd. has also built a manufacturing plant for high-voltage battery systems in Hefei.

Ge Wandi, CEO of Volkswagen Anhui, said: "We are systematically building Hefei into the innovation center of Volkswagen Group in China and accelerating the pace of development. The fact that we completed the construction of Volkswagen Anhui Plant in just 18 months fully proves this. Hefei has developed into the 'Silicon Valley of China', and we will make full use of Anhui Province's emerging technologies, outstanding infrastructure advantages and innovation potential."

Through Volkswagen (China) Technology Co., Ltd., the group integrated the development departments and decision-making processes in Hefei to develop models for the Chinese market. This approach simplifies communication between departments and significantly improves efficiency. All teams collaborate in the same time zone and focus on the local market. In addition, the company integrates the development and procurement of vehicles and parts in the early stages of product development. The two tasks go hand in hand, which improves speed, saves time and optimizes the cost structure.

Close cooperation in R&D with joint ventures SAIC Volkswagen, FAW-Volkswagen, Volkswagen Anhui, Guoxuan High-tech (batteries), and Xiaopeng Motors (electrification) will further optimize synergies. At the same time, partners such as Horizon Robotics (autonomous driving), Shanghai Muchuan Industrial Design (user experience) and Thundersoft (infotainment) are also working closely with CARIAD, the software department of the Volkswagen Group.

Creating cost efficiencies through high localization and early involvement of suppliers

Volkswagen (China) Technology Co., Ltd. integrates the advanced technologies of local suppliers in the early stages of product development to maximize the innovative power of the Chinese market. The group is building a supplier park covering an area of ​​450,000 square meters in Hefei. About 1,100 local suppliers provide software and hardware solutions to ensure that the most advanced technologies and application concepts are integrated in the early stages of new product development. The localization rate will gradually increase to 100%. This also includes localized quality inspection of supplier parts to further improve cost-effectiveness.

Han Hongming, Chief Technology Officer of Volkswagen Group China, said: "By closely linking our development and procurement teams and involving local suppliers and partners in product development as early as possible, we are constantly improving productivity and becoming more agile and faster. We are also using innovative technologies to speed up development, testing and production processes while ensuring safety. One thing is clear: we will stick to Volkswagen's DNA and our commitment to quality and safety without compromise."

Currently, 1,200 experts and talents work at Volkswagen (China) Technology Co., Ltd. in Hefei. It is expected that by the end of next year, the company will have more than 3,000 employees. Their work focuses on three clear goals: high-speed development, high cost-effectiveness, and further strengthening Volkswagen's quality and safety standards through various measures such as the application of cutting-edge technologies.

World premiere: Electric vehicle testing cycle shortened from three months to one month

Volkswagen (China) Technology Co., Ltd. conducts electric vehicle development tests in a system called E-4 poster, which can shorten the test cycle of electric vehicles from three months to one month. In the E-4 poster test process, electric vehicles can be placed under maximum load for internal durability testing with working batteries. This system can also simulate the entire vehicle life cycle, including charging and discharging the battery. This is the first demonstration of this solution in the global automotive industry. Previously, this test could only be carried out on open-air test roads. It saves test time while maximizing customer safety.

Volkswagen (China) Technology Co., Ltd. also uses virtual reality (VR) technology for ultra-modern testing and structural simulation. VR technology is used from the earliest stages of the design process to identify potential optimization points in body manufacturing, control details, and interior ergonomics before the first batch of prototypes are produced. This not only saves high rework costs in the design stage, but also ensures the comfort and quality of the product.

Use innovative technologies to significantly speed up the manufacturing process

The production process of Volkswagen Anhui Plant has also been significantly accelerated. The plant uses laser technology and industrial CT technology to analyze the quality, safety and durability of the entire car body or a single component in just a few minutes. While ensuring quality, the analysis time has been greatly shortened.

Faster production and R&D pace, higher technology localization rate, and consistent customer-centricity are the key to Volkswagen Group (China)'s implementation of the "In China, for China" strategy and its leading role in the era of intelligent connected vehicles.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.