VW Group says it is expanding its business in China and ramping up plans to add the SEAT brand to its biggest market with a focus on electric cars.
Volkswagen Group China, SEAT and the Chinese auto manufacturer JAC, together form the joint venture JAC Volkswagen, which will continue to drive SEAT’s market entry strategy. The Spanish brand aims to enter the Chinese market in the coming two to three years, VW says. The Spanish brand was withdrawn from the Chinese market in 2014 due to poor sales.
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The JAC Volkswagen joint venture was founded in 2017 and focuses on the development, production and marketing of pure battery vehicles. China, VW says, plays a central role in the global transformation of the Volkswagen Group and its decarbonisation program.
VW says that by 2028, more than half of the 22 million e-cars planned by the VW Group will be produced in China. The goal is to deliver around 1.5 million electrified vehicles, most of them pure e-cars, to customers by 2025.
The joint venture owned R&D centre in Hefei is described as an important pillar in developing future mobility solutions for the Chinese market. It also provides resources for the co-development of battery vehicles and components. The centre is currently under construction and is expected to open in 2021. In addition, JAC and SEAT plan to develop their own platform for smaller e-cars.
Dr. Herbert Diess, CEO of Volkswagen AG and Chairman of the Board of Directors of SEAT said: “In the world’s largest market for electric mobility, the close cooperation between SEAT and JAC will allow us to create synergies, which will significantly increase our market coverage. Notably, the smaller electric cars segment is growing rapidly and offers a lot of potential. “
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By GlobalDataLuca de Meo, CEO of SEAT: “The signing of this agreement is a new step forward in the strategic plan for the globalisation of SEAT. With the introduction of our business in China, we are boosting the future of the company and of electric mobility at the same time. Today, China is the benchmark country for electric vehicles. We aim to be a part of this ecosystem in order to exchange knowledge and make progress in achieving global mobility that is more sustainable.”
A Volkswagen spokesperson told reporters that SEAT is set to become a shareholder of the JAC-Volkswagen joint venture by the end of 2019 with at least 1% of the equity. Relaunching the SEAT brand should help the Volkswagen group increase its exposure and market share in the world’s largest vehicle market. Industry analysts believe annual sales of new-energy vehicles in China, comprising mainly electric vehicles, will reach 6-7m units by 2025.
Smart City Project enables development of future mobility solutions
In addition to the next steps for the JAC Volkswagen joint venture and SEAT, another agreement was signed to focus on the development of future mobility solutions.
In a smart city partnership with the city of Hefei in the Anhui province, requirements and demand for future mobility in a fully connected city are to be tested and smart mobility solutions will be developed. The strategic framework agreement was signed by Volkswagen Group China and its associated mobility company Mobility Asia, as well as JAC and the government of Hefei.
Dr. Stephan Wöllenstein, CEO Volkswagen Group China: “Volkswagen Group China is already exciting millions of Chinese customers with a wide range of vehicles. With this cooperation, we demonstrate that we are working hard to take a leading role in the field of smart mobility solutions in the Chinese market as well. “
The initiative will give Volkswagen the opportunity to test new technologies, business models and products in a connected smart city environment. The focus of the partnership is the development of autonomous driving. Volkswagen Group China, Mobility Asia and JAC will pool their resources and collaborate on autonomous mobility services, including self-driving vehicles (robotaxis) and autonomous fleet management. In addition, the Smart City partnership includes areas such as ride hailing or car sharing.
Around eight million people live in the city of Hefei, which aims to become a smart city with the help of this partnership.
