Volkswagen Group China

The Volkswagen Group showed its strengths in the fiercely competitive Chinese market during fiscal year 2023. Deliveries were up year-on-year in all segments.

BUSINESS DEVELOPMENT

In 2023, Volkswagen Group China demonstrated the strength of its portfolio in a market environment that was shaped by an intense price war with more than 100 local competitors. Rigorously following a sustainable business model, Volkswagen Group China and its Chinese joint ventures delivered 3.2 million vehicles (including imports) in the Chinese market in the reporting year, 1.6% more than in 2022. The market share stood at 14.5 (15.1)%.

In the premium and sports segment, Audi delivered 728,575 vehicles to customers in China, a significant increase of 13.5% year-on-year.

Volkswagen Group China continues to press ahead with its e-mobility campaign in line with its systematic approach of “In China for China”. In the battery-electric vehicle (BEV) segment, deliveries increased by 23% to 190,820 units. The main drivers of this success were the ID.3 and ID.4 models from the Volkswagen Passenger Cars brand and the Audi e-tron models. Not only was the ID.3 one of the best-selling electric cars with around 75,000 units delivered, but it also topped the rankings for the compact car segment in the fourth quarter. The ID.4 was in the top five in the compact SUV class thanks to deliveries of around 60,000. Deliveries of the ID.7 commenced in late 2023. The brand wishes to tap into the mid-sized segment with this model and reach more customer groups in China. Audi’s e-tron models witnessed very strong growth in 2023, surging to over 30,000 units in the first full year of sales.

The internal combustion engine (ICE) segment continues to provide a robust foundation for the Volkswagen Group’s long-term business development in China. Based on deliveries of 2,997,184 ICE vehicles, the Group expanded its market share to over 20% in 2023. High unit sales and a good cost structure for the ICE models enable Volkswagen Group China to build up its financial position for an accelerated transformation and take the next leap in innovation in connection with its “In China for China” approach.

Volkswagen Group China systematically strengthened its development expertise in China in fiscal year 2023. The newly established Volkswagen China Technology Company (VCTC) is the new center for development, innovation and procurement for intelligent, fully connected electric vehicles (ICV). The aim is to reduce the time to market for vehicles and components by 30% by implementing efficient development processes and using state-of-the-art technologies. Further synergies will be leveraged through close dovetailing of development work with the joint venture companies SAIC Volkswagen, FAW-Volkswagen and Volkswagen Anhui, and also with Gotion (batteries). The partners Horizon Robotics (autonomous driving), ARK (user experience) and Thundersoft (infotainment) will also be incorporated in close cooperation with CARIAD China. Cooperation with local car manufacturers also continued in 2023. The Volkswagen Passenger Cars brand concluded a technological framework agreement with XPeng. Audi and SAIC signed a memorandum to further expand their existing cooperation. Both partnerships provide for the joint development of intelligent, fully connected electric vehicles exclusively for the Chinese market.

Our joint ventures produced a total of 3.1 (3.2) million vehicles in fiscal year 2023. These joint ventures produce a mixture of established Group models and those specially modified for Chinese customers (e.g. with extended wheelbases), as well as vehicles developed exclusively for the Chinese market (such as the Volkswagen Lamando, Teramont, ID.6 X and ID.6 CROZZ).

The proportionate operating result of the joint ventures in the reporting year stood at €2.6 (3.3) billion. The negative impacts of a highly competitive market environment were offset by cost optimization.

The figures of the Chinese joint venture companies are not included in the operating result of the Group as they are accounted for using the equity method. Their profits are included solely in the Group’s financial result on a proportionate basis.

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