SAIC Volkswagen renewed its contract and plans to launch 18 new models in China.

Recently, SAIC Group and Volkswagen Group signed an extension agreement in Shanghai, renewing the joint venture period of SAIC Volkswagen from 2030 to 2040 on the occasion of its 40th anniversary. It is worth noting that this is their second early contract renewal since April 2002, aligning with FAW-Volkswagen’s joint venture period until 2041.

This early renewal by SAIC Volkswagen on its 40th anniversary marks the start of a new phase of joint ventures and collaborations in the Chinese automotive industry, known as '2.0'. Despite significant competitive pressure faced by joint venture car companies, this early renewal demonstrates Volkswagen Group's confidence in the future of the Chinese market. Furthermore, it reassures SAIC Volkswagen employees and boosts their confidence.

“New blood” has joined the new energy industry

According to the official announcement from SAIC Volkswagen, by 2030, they will launch 18 new models, with 15 specifically developed for the Chinese market. Both fuel vehicles and new energy vehicles will be promoted simultaneously.

In terms of product layout, SAIC Volkswagen will focus on intelligent fuel vehicles and launching models like the Touareg L Pro and Passat Pro. The company aims to achieve higher sales with the support of intelligence. The fully upgraded Touareg Pro will be officially launched early next year.

In the field of new energy, SAIC Volkswagen plans to launch new pure electric models, extended-range models, and plug-in hybrid models. By mid-2025, the Audi brand will introduce its first high-end intelligent connected electric vehicle to the market. Starting in 2026, two compact electric vehicles tailored for the Chinese market will be developed and produced on the CMP platform. Additionally, three plug-in hybrid models and two extended-range electric vehicles will enhance the lineup of new energy vehicle products.

It is worth noting that AUDI will be the first brand to collaborate with Huawei in smart technology, and there are prospects for expanding this partnership to include the entire SAIC Volkswagen brand to enhance its capabilities. This strategic announcement implies that SAIC Volkswagen will invest more resources in new energy vehicles, ensuring the simultaneous development of both fuel-powered and new energy vehicles. 

Additionally, SAIC Volkswagen is set to begin production of plug-in hybrid models, marking a significant milestone for the company. Currently, these models have gained widespread recognition in the market. In response to this trend, SAIC Volkswagen has promptly adjusted its strategy and aims to establish a presence in this field.

From “joint venture” to “win-win”

The European Union's imposition of additional tariffs on Chinese electric cars has been the most attention-grabbing industry event this year. Recently, there has been a new turning point in trade negotiations as disagreements among EU member states arise over the effectiveness and reasonableness of this policy, with Germany strongly opposing it. The early renewal of contracts between SAIC Motor Corporation and Volkswagen Group demonstrates Volkswagen's confidence in the future Chinese market and its commitment to its development strategy of "In China, For China."

So far, Volkswagen has established joint ventures with SAIC Volkswagen, FAW-Volkswagen, Volkswagen Anhui, FAW Audi, and SAIC Audi in China. In terms of products, it has produced platforms like MQB, MLB, MEB and PPE platforms specifically developed for the Chinese market including CMP, CEA and ADP. For AI, Volkswagen's CARIAD employs 1,100 people in China and has formed joint ventures with Horizon Robotics and ThunderSoft in the fields of intelligent driving systems (IDS), intelligent cockpits (IC), and intelligent connectivity.The Chinese market, as a core part of Volkswagen's global layout, not only contributes to stable sales but also drives innovation and growth in new technologies and energy sectors.

The new joint venture agreement shows that SAIC Volkswagen plans to turn its Anting production base into three centers. As the birthplace of SAIC Volkswagen, it will combine an electrification production center, a research and innovation center, and a smart manufacturing center to speed up local development transformation and upgrading. This strategic shift by SAIC Volkswagen also demonstrates how joint ventures have evolved from foreign parties only providing technology while domestic parties offer factories to adopting a "co-creation" approach in the era of new energy vehicles. Together they aim to deliver even better products for local consumers.

Although there are suggestions that the establishment of Volkswagen Anhui may impact North and South Volkswagen's importance as partners in the Chinese market during the era of intelligent electrification, German Volkswagen's decision to extend its joint venture cooperation agreement with SAIC Group demonstrates the immense potential and attractiveness of the Chinese market in the global automotive industry. It also reflects the significance of Sino-German cooperation in technological innovation and economic development. The collaboration between China and Germany in the automotive sector will positively impact the global car market, driving progress in automotive technology and sustainable development, ultimately providing consumers with a superior travel experience in this new era of alternative energy.