FYI: Volkswagen reinvents its strategy in China with three cutting-edge EV concepts designed specifically for the region’s discerning buyers, showcasing a commitment to compete with local automotive innovations.
Volkswagen: Pioneering a New Path in China
Volkswagen, once a trailblazer among Western automakers venturing into China, established its presence through a joint venture with SAIC in 1984. Over the years, this foothold enabled Volkswagen to amass substantial sales and profits within the world’s largest car market. However, the tides have turned, and Volkswagen, alongside other foreign companies, faces plummeting sales as Chinese consumers increasingly lean towards local brands that offer sophisticated electric vehicle (EV) technologies resonating more with their tastes.
Embracing "In China, For China"
Confronted with declining market shares, Volkswagen is channeling its resilience into a strategic rebirth with the unveiling of three innovative concept vehicles designed to recapture the Chinese market. The Volkswagen ID. Aura, ID. Evo, and ID. Era concepts—a novel SUV trio and one sedan—form the cornerstone of a refreshed "in China, for China" marketing approach. These models are being produced in collaboration with Volkswagen’s established joint ventures: FAW-Volkswagen, Volkswagen Anhui, and SAIC-Volkswagen.
Equipped with advanced autonomous driving features and tailored meticulously to Chinese consumers’ preferences, these models mark the beginning of over 20 new energy vehicles (as the Chinese government classifies plug-in hybrids and EVs) set to be released by 2027.
The Race to Embrace ‘China Speed’
Volkswagen is determined to adopt the defining trait of Chinese automakers: rapid model development. Historically, Western and certain Asian brands introduce new internal combustion engine models every five to ten years, punctuated by minor refreshes. In contrast, Chinese companies harness a deep reservoir of engineering expertise to expedite the launch of new models. Thomas Ulbrich, CEO of the Volkswagen China Technology Center, reveals an ambitious goal: Volkswagen aims to develop models within just 34 months.
Diving into the Concepts
Among these three promising vehicles, the ID. Era SUV emerges as particularly captivating. It is classified as an extended-range electric vehicle (EREV), combining an electric platform with a gasoline engine to recharge its battery—promising an impressive range of approximately 1,000 kilometers (620 miles).
The ID. Evo targets those who are young and lifestyle-oriented, eager to stand out. It differentiates itself with an upgraded 800-volt electrical architecture, surpassing the 400-volt systems of the ID.4 models in the US and Europe, ensuring quicker charging capabilities. This innovation positions it as the flagship of Volkswagen’s new all-electric sub-brand: ID. Unyx.
Lastly, the ID. Aura concept dazzles with an Arteon-inspired design, showcasing a violet hue popular among Chinese buyers. It’s set on Volkswagen’s newly developed Compact Main Platform, promising "natural driving behavior" with automated assistance, alongside features like an AI-based humanoid assistant.
Volkswagen’s Refreshing Approach in China
In essence, Volkswagen is adapting its strategy to meet the specific expectations of Chinese consumers—demanding either high electric range or EREV options, sleek design reminiscent of local competitors, and cutting-edge software that integrates seamlessly with other technologies. The connection with Xpeng for enhanced software solutions is anticipated but not yet part of these models.
The Multi-Billion Dollar Challenge
The question remains: Can Volkswagen reclaim its lost market traction? With a steep 10% decline in sales in China just last year, Volkswagen is striving to deliver what Chinese buyers truly want, moving beyond its extensive global model portfolio to focus on regional preferences.
Conclusion
As Volkswagen debuts these concepts at the Shanghai Auto Show, it ventures into both an opportunity and a challenge. Capturing the Chinese market’s favor once more is not just a strategic necessity—it’s a multibillion-dollar undertaking. For updates and insights, reach out to us at tips@automotive.fyi or on Twitter @automotivefyi.
Authored by William Kouch, Editor of Automotive.fyi.
