VW announces China strategy to bring EVs faster to market

The Volkswagen Group (VW) is investing around EUR1 billion (USD1.09 billion) in a  new state-of-the-art development, innovation, and procurement centre for fully connected  intelligent electric vehicles in the southern Chinese city of Hefei. 

The announcement was made on April 18, 2023  by the Volkswagen Group at the Shanghai Auto Show. The new company, with the project  name ‘100%TechCo’, combines vehicles and components R&D teams with purchasing. This will  leverage synergies in the development process and integrate state-of-the-art local technologies  into product development at an early stage. The aim is to align the Group’s vehicles even more  quickly with the wishes of Chinese customers and to achieve shorter time to market. With the  launch of 100%TechCo in 2024, the development times of new products and technologies will  be gradually shortened by around 30%. 

“The establishment of 100%TechCo is an important  step of our ‘in China, for China’ strategy. By consistently bundling development and procurement  capacities as well as integrating local suppliers at an early stage, we will significantly accelerate our  development pace. This will also strengthen the efficiency of cooperation for our joint venture and  increase our profitability,” said Ralf Brandstätter, Volkswagen Group board member for China.

 For R&D activities, 100%TechCo will not only bundle research and development for vehicles and  components in China, for China, but also merge procurement into a joint unit. To this end, local  suppliers will be involved in the early stages of product development in order to integrate the latest  technologies and application concepts into new products. In addition, the new company will more closely integrate the development projects of all of the Volkswagen Group’s joint ventures in China – SAIC, Volkswagen, FAW-VW, and Volkswagen Anhui. 

The new unit is expected to launch in early 2024 and will comprise more than 2,000 employees from procurement and R&D. The CEO will be Marcus Hafkemeyer, chief technology officer of Volkswagen  Group China. 

“With 100%TechCo, we are opening a new chapter in  our cooperation with our joint venture partners in Changchun, Shanghai, and Hefei, as well as the  Group’s brands. We are fostering seamless collaboration to bring customised products to the Chinese  market even faster and more efficiently. In a first step, 100%TechCo will steer the development of the  models of the Volkswagen Anhui joint venture based on the MEB platform and will be responsible for  the development of China-specific platform requirements and modules with a focus on electric  mobility,” Marcus Hafkemeyer, CEO of 100%TechCo, said.

The company is already expected to play a major role in the development of a future Volkswagen brand model to be launched in 2024. 

The foundation of 100%TechCo is another important milestone in the Volkswagen Group’s ‘in China,  for China’ strategy. It builds on further strategic measures taken by the company in order to address  market-defining trends in China at an early stage and to significantly increase the speed of innovation  locally. These include, for example, the recently announced strategic partnership with Horizon Robotics,  a leading provider of hardware and software solutions for automated driving in China.