Volkswagen revs up designed-in-China approach to catch up with local rivals in EV market

Core Viewpoint - Volkswagen Group is intensifying its "all in" strategy for China, focusing on local development capabilities and a new electric vehicle architecture to regain its market leadership against domestic competitors in the largest vehicle market globally [1]. Group 1: Strategic Developments - The formation of Volkswagen Group China Technology Company (VCTC) allows for the development and validation of new vehicle platforms outside Germany for the first time in the company's history [2]. - VCTC aims to enhance efficiency by enabling parallel processes for software, hardware, and full-vehicle validation, thus shortening decision-making loops and accelerating innovation [4]. Group 2: Market Position and Challenges - Volkswagen has been a dominant player in China's car market since 1984 but was overtaken by BYD in 2023, as its petrol-powered models lost appeal among consumers [5]. - In 2023, Volkswagen sold 2.9 million units in China, reflecting a 9.5% decline from the previous year, while domestic EV manufacturers now account for over 90% of mainland EV sales [5]. Group 3: Technological Advancements - VCTC and VW's software unit Cariad are launching the China Electronic Architecture, specifically designed to meet the needs of Chinese customers, connecting all in-car electronic control units, sensors, and actuators [6].