AUTONEWS
Volkswagen is one of those brands that, although used to leading, finds itself in a somewhat uncomfortable position when it finds itself overtaken by relatively young brands without a history with emblematic models, such as the Golf, Beetle or Pão de Forma. But that is precisely what happened at the start of this year and in what is the largest automobile market in the world, China. Then, Volkswagen was beaten by BYD, a brand that was only 20 years old (2003), that is, it was founded almost 20 years after Volkswagen entered the Chinese market, which happened in 1985.
After 38 years in the Asian sales olympus, Volkswagen ended up giving up its place to a brand that sells only electric or plug-in hybrid vehicles (PHEV), precisely those that customers tend to look for most. And while this favors BYD, the Germans – who have alliances with the Chinese SAIC and FAW – continue to “lean” on combustion models in the People's Republic of China. In the largest market in the world, Handelsblatt writes that Volkswagen depends excessively on the sale of this type of models, when the numbers leave little room for doubt: combustion vehicles are the ones that are suffering the most from a commercial slowdown. But why does the Wolfsburg manufacturer report this dependency when it has several electric models? Simply because the ID lineage lacks competitiveness. Or, in other words, it does not have a range adapted to local needs.
Quoted by the aforementioned German publication, Volkswagen's CEO, Ralf Brandstätter, admits that the new times brought about by electric technology have raised new challenges. The entry of new players did little to help traditional builders to close ranks. Local manufacturers of battery-powered vehicles such as BYD, Nio and Xpeng, which have expanded their range of electric models and some of them are more affordable than Volkswagen's, are making life more complicated for the largest European car manufacturer (and beyond). And the situation became even more delicate with the price war. Conclusion: “Now it’s not as easy to grow in China as it used to be”, says Volkswagen’s top manager.
Having identified the flaws in its electrical offensive in China, Volkswagen is now accelerating so as not to be left behind. Although in the distant past he claimed that he would not follow a strategy of lowering prices to face the competition, the reality is that in the recent past this happened, at least with the ID.3. It was in July that the hatchback saw its price reduced by 16% in China and it was also precisely in that month that the Germans took another step forward to strengthen themselves in the Chinese market. They announced the investment of 700 million dollars in Xpeng, to guarantee a 5% stake in the Chinese manufacturer. Curiosity? Xpeng has only been on the market for nine years and sells fewer cars per month than Volkswagen sells per day…
It was later learned that this entry into Xpeng would go on the road in 2026, in the form of two new battery-powered models with the Volkswagen emblem and a complete reversal of what has been the usual flow of technology and know-how from West to East. . Now, according to Handelsblatt, it is known that Volkswagen is willing not to “give the gold to the bandit”, as they say, but rather to risk depending more on Chinese suppliers. With this, it will try to avoid temporary failures and lower costs, while at the same time designing products that are more adapted to local drivers – that is, cheaper.
The brand's plan is to introduce four new electric models in China in 2026, with prices between €18,000 and €22,000. And, if at this point you're already thinking that this will be done based on MEB Entry, the platform that underpins ID.2All, don't be fooled. The brand aims for low cost and, as such, the platform for the entry segment will be designed for China, aiming for faster-to-produce and cheaper vehicles. The Chinese certainly benefit from the integration of 95% of local components and the “made in China” seal created by the Anhui factory.
It is recalled that this manufacturing unit was established in a joint venture with the JAC Automobile Group in 2017 and, three years later, it changed from JAC Volkswagen Automotive to Volkswagen Automotive Company Limited, at the end of 2020, when the Germans became 75% holders. of capital. Currently, these facilities, in addition to producing electric vehicles, are also dedicated to research and development.
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