The Volkswagen Group is one of the largest and most well-known car manufacturers worldwide. Headquartered in Wolfberg, Germany, the group comprises a diverse portfolio of brands, ranging from economy cars to luxurious vehicles. To keep up with the rising demands of the automobile market, Germany and China are teaming up to produce something they’ve never done before.
A brief history of Volkswagen in China
In the 1970s, Volkswagen was one of the first automotive companies to enter the Chinese market after it opened its economy to foreign companies. VW’s first joint venture in China was its Shanghai Volkswagen Automotive Co, which became extremely successful in the country.
By the 1990s, VW was quite established in the Chinese market, with its passenger cars dominating almost all other brands, and in the early 2000s, VW’s other Chinese joint venture produced Audi, which became the top luxury brand in China for many years, especially for government and business buyers.
However, by the 2010s, other companies like Toyota, Nissan, and Honda began to catch up, and while VW remained quite dominant, with the rise of electric vehicles more recently, other Chinese brands have been surging ahead of the German brand with better electric technology and software. To fight back, Volkswagen is now releasing an electric vehicle with its new partner Xpeng.
Volkswagen partners with Xpeng to launch an all-new electric vehicle
Due to a dip in its market share over the past few years, VW has decided to develop its most intelligent EV model to date, with the Chinese company Xpeng. This fully electric SUV will be assembled in collaboration with Anhui Jianghuai Automobile Group, and will be called the ID Unyx 08.
The model took the two companies 30 months to complete, a lot quicker than usual. VW explains the collaboration:
“Leveraging targeted local partnerships and robust in-house research and development capabilities, Volkswagen Group has fully integrated into China’s automotive ecosystem, enabling it to customise products that meet Chinese customers’ needs at ‘China speed’.”
While VW tried to invest in hydrogen to no avail, it has had more success investing US$700 million for a 5% stake in Xpeng back in 2023, for its top-quality autonomous technology. The result comes in the form of the ID Unyx 08 just might give rivals like Tesla a run for its money.
A closer look at the ID Unyx 08
Tesla is probably the most well-known brand for autonomous driving, but this might not be the case for much longer. In China, their self-driving systems are usually classified as Level 2 or L2+, which requires drivers to keep their hands on the wheel at all times, but the ID Unyx 08 is now a Level 2++, creating an entirely new category.
The SUV is Volkswagen’s first mass-produced model in China that is built on an 800-volt ultra-fast electrical system, with a range of 700km from one charge. However, this might not be enough to win back the Chinese market. As a Shanghai independent analyst puts it:
“Chinese customers will closely monitor its pricing to decide whether to choose a Volkswagen EV over those from competitors like BYD or Geely, even if the vehicle appears as hi-tech and smart as the existing bestsellers.”
So while Volkswagen is doing its best to increase its market share again, only time will tell if the Chinese public opt for its new EVs, or stick to the Chinese brands they know. VW is working on other interesting and futuristic projects as well, and it is clear the brand is focused on innovation at a time when it needs to win back public interest.
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