In a strategic move to reclaim its standing in China’s competitive automotive market, Volkswagen announced on Friday its plans to develop a new platform for entry-level electric vehicles (EVs) specifically tailored to Chinese consumer preferences. The initiative, named the A Main Platform, aims to leverage local components and align with the digital expectations of the younger and tech-savvy Chinese buyers.
Tailoring to Chinese tastes
Ralf Brandstaetter, Volkswagen’s China chief, revealed that the A Main Platform would be designed to suit Chinese consumer tastes, focusing on key aspects such as the battery, electric drive, and electric motor. The platform, derived from the modular electric drive matrix (MEB), Volkswagen’s existing electric-only platform, is anticipated to primarily engage Chinese suppliers. The company aims for the platform to hit the market by 2026, boasting a development time one-third faster than previous platforms.
Strategic cost optimization in a price-sensitive market
Acknowledging the price sensitivity of the Chinese market, Brandstaetter stressed the need for Volkswagen to optimize costs as EV volumes increase. The move is seen as a response to intense competition with local EV manufacturers and a shift away from gasoline vehicles. To enhance cost efficiency, Volkswagen plans to source components locally and enhance profitability, aligning with China’s dynamic automotive landscape.
Streamlined development processes: VCTC centre
The recently inaugurated EV development and procurement centre in Hefei, known as Volkswagen Group China Technology Company (VCTC), plays a crucial role in streamlining development processes. Ludger Luehrmann, CTO of VCTC, highlighted a 37% reduction in the price of dashboard displays achieved by switching to a Chinese supplier. The centre aims to increase efficiency, shorten product development times by 30%, and cater to specific Chinese market needs.
Expanding product range and market share
Facing stiff competition, Volkswagen plans to expand its product range in China with four entry- and mid-level EV models, priced between CNY 140,000 (USD 19,400) and CNY 170,000. These models, intended to compete with gasoline cars in the same segment, will be produced through Volkswagen’s joint ventures with SAIC and FAW. The move aligns with the company’s commitment to offering a diverse range of EVs to cater to various consumer segments.
Strategic alliances and future developments
Volkswagen’s collaboration with Chinese EV maker Xpeng Inc. in July marked a significant step in its broader EV strategy. Two new models, targeting mid-level consumers, are currently under development as part of this partnership and are set to be rolled out from 2026.
As Volkswagen accelerates its efforts to meet the evolving demands of the Chinese market, the introduction of the A Main Platform reflects a commitment to localisation, cost efficiency, and a keen understanding of the unique preferences of Chinese consumers. With ambitions to introduce 10 new EV models globally by 2026, Volkswagen positions itself for a transformative journey in the world’s largest auto market.