All set for future mobility: Volkswagen Group and SAIC strengthen long-standing partnership with new joint venture agreement

“Volkswagen and SAIC are pioneers in individual mobility in China. Together we established one of the first international joint ventures in the region 40 years ago. Since its establishment, SAIC VOLKSWAGEN has earned the trust of more than 28 million customers. With the long-term contract extension, we emphasize the importance of this cooperation and the importance of the Chinese market for the Volkswagen Group. We are accelerating the transformation of SAIC VOLKSWAGEN in accordance with our ‘In China, for China’ strategy at all levels, and bring a new generation of electrified vehicles on the road by 2026. This ensures that our partnership is economically and technologically future-proof,” said Ralf Brandstätter, Member of the Board of Management of Volkswagen AG for China “China is a driving force for innovation for autonomous driving and electric mobility intensifying our integration into the Chinese ecosystem and consistently leveraging local innovation strength This also creates a strategic competitive advantage for the Volkswagen Group worldwide.

Wang Xiaoqiu, Chairman of SAIC Motor, said: “Electrification and the transformation of the car into an intelligent vehicle are the decisive trends in the automotive industry. In the face of the highly dynamic market, SAIC Motors, the first Chinese automaker to sell more than one million cars in the electric segment and in overseas markets, its collaboration with Volkswagen.The focus of SAIC VOLKSWAGEN is on the development of new, intelligent electric vehicles to maintain an industry-leading position in smart technologies. The decisive factors here are consistent customer orientation and the use of our own innovative strength. We will break new ground with the joint venture to achieve sustainable and stable sales growth and a leading market position we contribute to the further positive development of the Chinese and global automotive industry.”

The original joint venture agreement was valid until 2030. However, due to the multi-year planning cycles of new products and the associated investments, basic agreements are typically extended several years before their end date.

With the new agreement, both partners are now creating a strong and timely foundation for the successful development of SAIC VOLKSWAGEN beyond 2030. With this in mind, Volkswagen and SAIC have identified three key areas to accelerate the transformation of the SAIC VOLKSWAGEN joint venture with Volkswagen Passenger Cars and Audi Brands:

1. Expansion of product offensive with new E models, Range Extender variants and plug-in hybrids

In 2030, SAIC VOLKSWAGEN will introduce a total of 18 new models to the market. In light of the dynamic market development, the joint venture partners are particularly focused on an accelerated electrification strategy. This includes eight new electric models. As early as 2026, two electric vehicles will be launched based on the newly locally developed “Compact Main Platform” (CMP) – equipped with a state-of-the-art zone electric architecture used for the first time across the group. In addition, the still very profitable internal combustion engine range will be transferred to the world of electric mobility by 2026 with three plug-in hybrid models and, for the first time, two range extenders. This will quickly further strengthen the company’s position in the rapidly growing market for fully electric and partially electrified vehicles. At the same time, the new vehicles will be consistently tailored to customer needs as part of the “In China, for China” strategy. Of the 18 models that SAIC VOLKSWAGEN will introduce to the market in 2030, 15 vehicles will be developed exclusively for the Chinese market.

2. Gradual optimization of the production network with a focus on efficiency and productivity

Given the rapidly growing market demand for electric vehicles and increasing competitive pressure, the joint venture partners will also accelerate the transformation of SVW’s production network with a focus on cost efficiency and productivity. In this context, the existing production capacity for internal combustion vehicles will be gradually reduced in the coming years. While many SVW plants are becoming or have already been converted to produce electric vehicles based on customer demand, alternative economic solutions will be explored on a case-by-case basis. This also applies to the joint venture site in Urumqi. Due to financial reasons, the land has now been sold by the joint venture as part of the restructuring. The same applies to the test tracks in Turpan and Anting.

3. Consistent decarbonisation initiatives with ambitious targets

As part of the extension of the joint venture agreement, both partners have agreed on ambitious decarbonisation targets for sustainability. SAIC VOLKSWAGEN aims to reduce its CO₂ emissions by 25 percent in 2030 compared to 2018 levels and is actively pushing forward its transformation towards carbon neutrality at the corporate level. In doing so, the SAIC VOLKSWAGEN group is following the goal of achieving CO2 neutrality by 2050. This positions the company as a pioneer in decarbonisation within the Chinese automotive industry.

SAIC and Volkswagen continue the 40-year success story

Over the past four decades, the Volkswagen Group, together with its Chinese partner SAIC, has adapted its strategy precisely to meet the needs of Chinese customers. With Santana, millions of customers were given the opportunity to enter the world of individual mobility. Later, the first China-specific models such as Lavida were introduced, which became multi-million sellers and continue to enjoy great success in the market today. Since 2007, ŠKODA models have also been produced by SAIC VOLKSWAGEN. The electrification strategy in China was launched already in 2017. The ID.3 is currently one of the best-selling pure electric vehicles in the Chinese market and leads the segment of compact hatchbacks.

The group is driving transformation with the “In China, For China” strategy.

As part of its “In China, for China” strategy, the Volkswagen Group is determined to drive its transformation in China. The group is strengthening its local development skills within e-mobility, digitization and autonomous driving. This implies both improved cooperation with its Chinese partners and the consistent expansion of its own further development capacity. A key role in this context is played by the new development and innovation center in Hefei, where around 3,000 developers are working on the next generation of fully connected intelligent electric cars. This also accelerates the group’s decision-making and development processes in the region, contributing to a reduction in the development cycle for new products by 30 percent. This enables the company to react more quickly to market-defining trends in China and to make the most of the market’s growth dynamics.

Over the next three years alone, the group and its brands will bring 40 new models to the Chinese market, half of which will be electrified. By 2030, the group will offer more than 30 electric models in China.