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Volkswagen Group is in an interesting position. It has done better than most legacy automakers to electrify, but it’s still had numerous struggles and is in the “legacy automaker” bucket — which just makes life harder when it comes to the electric vehicle revolution. Part of its solution for going beyond its current position in the highly competitive Chinese market is through its partnership with SAIC, one of the largest automakers in China. The partnership has been in place for a long time (40 years), but in recent years it has been a help for electrifying in China. Now, the two have announced they’ve extended their joint venture — to 2040! That’s a long time.
This partnership is part of Volkswagen’s “In China, For China” strategy. Here’s the rationale for the long and early extension of the partnership from 2030 (where it was) to 2040: “By extending the agreement, the partners are creating early planning security beyond 2030 in a very dynamic development phase of the Chinese automotive market. At the same time, Volkswagen and SAIC are accelerating the transformation of their joint venture company, SAIC VOLKSWAGEN, in the areas of product portfolio, production, and decarbonization. The shared goal of the partners is to achieve a leading market position for SAIC VOLKSWAGEN with the Volkswagen Passenger Cars and Audi brands in the era of intelligent, fully connected electric vehicles.”
There are three core areas they are focusing the partnership in coming years:
- Expansion of Product Offensive with New E-Models, Range-Extender Variants, and Plug-In Hybrids
- Gradual Optimization of the Production Network with a Focus on Efficiency and Productivity
- Consistent Decarbonization Initiatives with Ambitious Goals
“China is a driver of innovation for autonomous driving and electric mobility. With the new agreement, we are 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,” says Ralf Brandstätter, Member of the Board of Management of Volkswagen AG for China. “Volkswagen and SAIC are pioneers of 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 underline the importance of this collaboration and the significance of the Chinese market for the Volkswagen Group. We are accelerating the transformation of SAIC VOLKSWAGEN in line with our ‘In China, for China’ strategy on all levels, bringing a new generation of electrified vehicles onto the road by 2026. This ensures that our partnership is economically and technologically future proof.”
“Electrification and the transformation of the car into an intelligent vehicle are the defining trends in the automotive industry. In view of the highly dynamic market, SAIC Motors, the first Chinese carmaker to sell more than one million vehicles in the electric segment and in overseas markets, is deepening and expanding its cooperation with Volkswagen,” Wang Xiaoqiu, Chairman of SAIC Motor, says. “The focus for SAIC VOLKSWAGEN is on the development of new, intelligent electric vehicles in order to maintain an industry-leading position in the field of smart technologies. The decisive factors here are consistent customer orientation, quality management and the use of our own innovative strength. We will break new ground with ‘China Speed’. The aim of the joint venture is to achieve sustainable and steady sales growth and a leading market position. In this way, we are contributing to the further positive development of the Chinese and global automotive industry.”
More details of the plans can be found here, particularly in the sections on the partnership’s three core areas noted above.
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