Volkswagen Group said it planned to develop a new platform specifically for entry- and mid-level battery electric vehicles (BEVs) in China in an attempt to recover the significant market share lost to local vehicle manufacturers such as BYD in the last few years.

The automaker made the announcement at the opening of the new Volkswagen Group China Technology Company (VCTC), a new US$1.1bn EV development and procurement centre in Hefei seen as central to the company’s so called ‘China for China strategy’.

VW said the centre would significantly increase the use of local component suppliers to lower costs and become more competitive in the world’s largest vehicle market.

Ralf Brandstaetter, CEO of Volkswagen China, said the new platform, known as the A Main Platform, would be designed specifically to meet Chinese consumer preferences with regards to the battery and electric powertrain. He said Chinese buyers were now “younger, tech savvy and like an immersive digital experience [in] their cars”.

The new platform would be derived from the existing modular electric drive matrix (MEB) platform, which the company has used since 2019, but would use parts from as many local suppliers as possible, instead of global suppliers, to save costs.

Brandstaetter said China was a “very price sensitive market and we need to minimise costs. When our BEV volume rises, it is important our profits also rise in a sustainable way”.

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By GlobalData

The A Main Platform being developed at VCTC is expected to be ready for launch by 2026, a third faster than previous platforms. The centre’s chief technology officer, Ludger Luehrmann said, as an example of cost cutting, the company was able to reduce the dashboard cost 37% by switching from a global to a Chinese supplier.

Using the new platform, Volkswagen would step up its new model launches specifically in the entry- and mid-level BEV segments. It aimed to launch four new models initially, including three priced between CNY140,000 and CNY170,000 ($19,600-$23,800), to help it compete more effectively with local brands.

These would be produced by its two main Chinese joint ventures, SAIC-VW in Shanghai and FAW-VW. This was understood to be additional to two new models VW has agreed to develop with BEV startup XPeng.

In the meantime, VW said it also plans to introduce 10 new BEVs globally by 2026 with time to market expected to reduce from four years to close to 2.5 years, in line with its Chinese operations.

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