Volkswagen China CEO Feng Sihan: The lack of core will continue this year, and half of the 12 new cars will be pushed to be pure electric

"We want to double our ID sales." On January 11, Feng Sihan, CEO of Volkswagen Group (China), told first financial reporters that the growth in sales will be based on more models and alleviate the difficulties of supply; this year Volkswagen will launch about 12 new cars, half of which are pure electric models.

According to the data of the Association, in December 2021, the retail penetration rate of new energy vehicles was 22.6%, of which the penetration rate of new energy vehicles of independent brands reached the highest of 39%, while the penetration rate of new energy vehicles of mainstream joint venture brands was only 3.3%. At a penetration rate of 3.3%, volkswagen brand ID. series models contribute the vast majority of market share. That is to say, most of the joint venture brands have not yet made efforts in the field of new energy.

"If Volkswagen, Toyota, and GM have sufficient chip supply, the market structure may change." Feng Sihan told reporters that 80% of the benchmark models of Volkswagen's new energy vehicles are Chinese domestic models, and only 20% of the benchmarks are international models, and attach great importance to China's domestic competitors. He expects that by 2030, the market share of New Energy Vehicles in China will reach more than 50%, and if the total market volume is about 30 million by then, the sales of electric vehicles will reach a scale of 15 million to 16 million.

From the pricing point of view, the Volkswagen ID. family is currently in a market of 200,000 to 300,000 yuan as a whole. China's electric vehicles present the characteristics of two large and small in the middle, and in the electric vehicle market in this price range, Volkswagen currently has few competitors. In addition to the high-end market where a small number of products of the new car-making forces such as Weilai and Ideal, which sell more than 300,000 yuan, the electric vehicles of traditional independent car companies and new car-making forces are more concentrated in the low-end market. At present, the mid-range market demand for the Volkswagen ID series is growing, which is a big positive for Volkswagen. However, more and more independent car companies and joint venture brands have begun to increase their layout in this market segment, which means that Volkswagen will face more intense competition.

In Volkswagen's new energy strategy, Volkswagen (Anhui) plays an important role. "Colleagues at the German headquarters always compare the progress of Volkswagen (Anhui) with the progress of Tesla's Berlin factory. The progress of the construction of the factory in Anhui is very fast, and it will be ready to put into production by this summer. The first two cars in production are brand new models, further development work is needed, and it will take another year to produce the production car. Feng Sihan told reporters that it will build an ecosystem around Volkswagen's (Anhui) MEB manufacturing plant, which includes both digitalization and software development, such as the branch of the group's CARID software company, as well as batteries, spare parts, electronics, electrical and other aspects of support and support.

In the core battery field of electric vehicles, Volkswagen invested in Guoxuan Hi-Tech. Guoxuan Hi-Tech will also work with Volkswagen Group to develop battery technology and launch standard batteries. However, Feng Sihan said that the strategic investment in Guoxuan Hi-Tech does not mean that Volkswagen will reject cooperation with other partners. In the domestic market, in addition to Guoxuan Hi-Tech, Volkswagen also has cooperative relations with CATL and A123. "We will do more proportional optimization according to the design requirements and technical particularities of the car battery to ensure that we neither overly invest some of the focus on the research and development of certain technologies, nor do we waste the simultaneous development of other technologies." Feng Sihan said.

In terms of sales model, Volkswagen adopted an agency system for the ID. series. Feng Sihan told reporters that Volkswagen will build a number of ID. car flagship stores, further expand the ID. special city exhibition hall, the existing 115 have spread throughout all of China's new energy vehicle sales of the main city, the number of urban exhibition halls will increase to 200.

In addition, the Volkswagen Group will promote the implementation of the software strategy in China. Volkswagen has set up an independent software department CARIAD, which is divided into four aspects from the perspective of China's layout: one is to set up its headquarters in Beijing; the other is that Volkswagen (Anhui) will have a team of CARIAD, mainly around standard software and electronic architecture for in-vehicle applications; third, Volkswagen will set up a team focusing on automatic driving in Shanghai; fourth, it will set up a pure software department in Chengdu, mainly responsible for coding programming business.

In the past 2021, Volkswagen delivered 3.3 million units in China, down 14% year-on-year. "The performance in the first half of the year was strong, but the second half of the year continued to be affected by the shortage of chip supply, and some key suppliers could not deliver the semiconductor chips we needed in a timely and sufficient manner, which greatly affected production, and the impact of chip shortages in 2022 will continue." Feng Sihan told reporters. In addition, for the liberalization of the share ratio policy, Feng Sihan said that Volkswagen's relationship with partners will not change.