Joint ventures are currently facing three 'big mountains': first, market space is being squeezed; second, transformation and upgrading are slow; and third, there is still room for improvement in the speed of product launch and competitiveness, "Wu Yingkai, Deputy General Manager of FAW Volkswagen Automotive Co., Ltd., recently told reporters.
According to data from the China Association of Automobile Manufacturers, in December 2024, the retail sales of mainstream joint venture brand passenger cars were 710000 units, a year-on-year decrease of 11%; Among them, the retail share of German brands was 16.2%, a year-on-year decrease of 4.4 percentage points. From the perspective of electrification, the penetration rate of new energy vehicles in the Chinese automotive market has exceeded 50% for several consecutive months, but the penetration rate of mainstream joint venture brand new energy vehicles is still less than 10%. Taking the data from December 2024 as an example, the penetration rate of new energy vehicles in domestic brands was 71.3%, in luxury cars it was 33.9%, while the penetration rate of new energy vehicles in mainstream joint venture brands was only 4.8%.
Volkswagen has launched the pure electric product ID series, with sales increasing in 2024. However, compared to domestic brands, the market space for the ID series still needs to be improved.
On January 11th, FAW Volkswagen announced that it will invest over 18 billion yuan annually in research and development, with a focus on areas such as architecture, cockpit, intelligent driving, three electronics, and styling. FAW Volkswagen has invested a total of billions of yuan in electrification transformation, adopting a new electric vehicle platform, comprehensively upgrading electronic architecture, and achieving a significant reduction of 30% in the number of control units in a single vehicle through CEA regional architecture, optimizing costs by 40%, and accelerating research and development by 30%.
To make up for the existing shortcomings or potential points, in terms of intelligence, firstly, we need to strengthen our independent research capabilities. Currently, we have technical reserves in intelligent cockpit, intelligent driving, and electronic and electrical architecture. Secondly, we actively attract Chinese suppliers, with 30 to 40 new suppliers entering every year, mainly leading intelligent companies, and actively co creating with excellent domestic suppliers, "Wu Yingkai told reporters. FAW Volkswagen products adopt the latest generation of Horizon Robotics chips - J6 chips. In the future, higher-level L2++autonomous driving functions, 4-nanometer process chips, 3.0 AI cockpits, AI large models, and other functions will be gradually integrated into the vehicle. He also stated that 2026 will be the first year of hybrid technology for FAW Volkswagen, with the launch of new PHEV and extended range hybrid products.
Wu Yingkai stated that in the next 20 months, the three major brands of FAW Volkswagen (Audi, Volkswagen, and Jetta) will launch 19 new products one after another, with almost one product released every month, and multiple routes including "oil", "electric", and "hybrid" will coexist. Among them, Volkswagen brand fuel vehicles will undergo a comprehensive upgrade and replacement. FAW Audi will launch five new models, including the all-new Audi A5L, Audi Q5L, Audi Q6L etron, Q6 e-tron Sportback, and Audi A6L e-tron. In addition to the newly launched VA7 and VS8 in the second half of the year, Jetta brand will also launch five new energy vehicles.
In 2024, FAW Volkswagen has completed terminal sales of 1.6591 million vehicles (including imported Audi cars), ranking first among domestic joint venture car companies. However, the sales of its sub brands Volkswagen, Audi, and Jetta have all shown a downward trend.
Although our total sales are still third, the gap between us and the first place has narrowed from 130000 units in 2023 to 70000 units in 2024. The domestic fuel vehicle segment market has returned to first place after a four-year hiatus. The overall sales of traditional luxury brands are in a downward trend, mainly due to changes in market structure and demand. Many new forces still provide a lot of good products, and their marketing is also very distinctive, making customers pay more attention to their advantages. "Li Fenggang, Executive Vice General Manager of FAW Audi Sales Co., Ltd., told reporters that the newly launched products in 2025, based on PPC fuel platform and PPE high-end pure electric platform, will compete with China's top players. Collaborate with suppliers of soft technology to provide better technology for intelligent driving and intelligent cockpits.
In addition, Wu Yingkai told reporters that the Jetta brand has already started exporting, and the Volkswagen brand will also launch an export strategy in 2025, including business in overseas markets such as the Middle East, Africa, ASEAN, and South America, and relevant negotiation work has been initiated.
(This article is from First Financial)
