On the Dash:
- Volkswagen will expand exports of China-made vehicles to new international markets, excluding Europe.
- The company is accelerating development in China through its Hefei hub to compete with Chinese automakers.
- Volkswagen can now develop vehicle platforms entirely in China, reducing EV development costs by up to 50%.
Volkswagen plans to expand exports of vehicles developed and built in China to additional overseas markets as it seeks to strengthen its position against fast-growing Chinese competitors. The automaker confirmed Tuesday that it is evaluating opportunities in Southeast Asia and Central Asia after recently beginning shipments of China-made petrol sedans to the Middle East.
Thomas Ulbrich, chief technology officer of Volkswagen Group China, said the effort is part of a coordinated decision-making process with the company’s German headquarters to ensure each market receives the appropriate vehicle portfolio. Volkswagen’s Chinese operations can produce both internal combustion engine models and electric vehicles, giving the company flexibility as it reviews new export destinations.
Volkswagen will not export these China-made models to Europe. The company said the vehicles use a different electronic architecture and software system than those designed for the European market, making them unsuitable for that region.
The expansion plans align with Volkswagen’s broader “In China for China” strategy, which aims to regain market share by speeding up decision-making and product development in China. The automaker has invested billions of euros into its production and innovation hub in Hefei as it works to compete more effectively with domestic manufacturers. The strategy also positions Volkswagen to counter the rising global push from Chinese automakers, many of which are targeting overseas markets to offset intense competition and excess production capacity at home.
Volkswagen said it reached a major milestone by gaining approval to fully develop new vehicle platforms and core technologies in China without having to route them through Germany. The company noted that developing a new electric vehicle platform in China can cost up to 50% less due to the scale of available suppliers and the availability of advanced technologies.
Ulbrich added that vehicles built using Volkswagen’s China-developed electronic architecture will be sold outside China soon, although he did not specify the markets or timeline.
