Volkswagen launches Chinese Wolfsburg, with costs reduced by up to 50 per cent
In the Hefei centre, vehicles produced for the first time in total autonomy from the headquarters in Lower Saxony, which remains the hub for operations in western markets
Key points
Electric cars made entirely in China, at prices that are finally competitive and above all with production costs up to 50 per cent lower than those possible in Germany. Volkswagen is trying to play one more card to catch up with its Chinese rivals and regain some of the lost positions in the most important car market.
The centre of Hefei
The pivot on which the Wolfsburg company's ambition rests is the new EUR 2.5 billion centre in Hefei, just over two hours by train from Shanghai. Here, software, hardware and vehicle validation are integrated in one facility. Above all, Hefei, dubbed 'a kind of second Wolfsburg in China' by the Frankfurter Allgemeine Zeitung, is the first site in the group's history where models and platforms are fully developed without the intervention of the headquarters in Germany, which remains the hub of operations in western markets.
The complex has more than 100 workshops spread over an area equal to that of about 15 football pitches. Rationalisation of the supply chain (including batteries), development periods 30 per cent shorter than the traditional 50 months, and lower salaries mean that the production cost of some electric models can be cut by up to 50 per cent compared to those incurred in Germany in 2023, according to the company, which is preparing to launch more than thirty electric vehicles in China over the next five years, on Tuesday 25 November.
Volkswagen is also trying to regain competitiveness in the field of autonomous driving and car software, taking advantage of technology partnerships with China's Xpeng and the US company Rivian. Regaining lost market share, which explains a large part of the German group's crisis, will certainly not be a walk in the park: Volkswagen has been surprised by China's decisive shift towards electric cars, imposed by the Beijing regime and exploited by local manufacturers to establish themselves thanks to technological development and affordable price lists.
While the German manufacturer's strategy had initially been to reserve production in China for the Chinese market, the group now aims to increase exports to other markets, starting with the Arab countries and then moving on to Central and South-East Asia. Europe, on the other hand, would remain excluded.
