Not long ago, I received a gift from the 74th issue of Volkswagen China's "YUE Reading Program" - "1000 Days in Shanghai, Volkswagen Connects with Chinese Legends".
Martin Post, then an executive at Volkswagen AG in Germany, Posth) recounted his experience when he came to Shanghai 40 years ago to set up SAIC Volkswagen. In the book, published in 2007, he wrote: "My first trip to China made me think for a long time. I could feel the nation's desire for improvement, the optimism of the people, a real interest in change. ”
The story of his 1,000 days in Shanghai and Volkswagen's 40 years in China is now familiar to us.
On June 27, 2024, the story was added to its latest chapter.
Volkswagen Group, SAIC Motor, Volkswagen (China) Investment Co., Ltd., Volkswagen (China) Technology Co., Ltd. (VCTC) and SAIC Volkswagen have signed a number of technical cooperation agreements on SAIC Volkswagen's new product projects to develop three plug-in hybrid models and two pure electric models in China, and China and Germany will jointly "empower technology" for the joint venture, which will be launched to the market from 2026.
From "in China, for China", to the relocation of the R&D decision-making center from Wolfsburg to Anhui; From the global car made in China to 100% local development, Volkswagen's continuous localization process in the Chinese market has entered a new stage.
At this moment, when we turn to the history recorded in this book, we suddenly look back and see that "change, anticipation and optimism" are still more than 40 years later.
Chen Xianglin, "Witness to the Development of Shanghai's Automotive Industry", former Chairman and Secretary of the Party Committee of Shanghai Automotive Industry (Group) Corporation, summed up the following passage in the book: "In today's Chinese market, in the face of many competitors, the development of Shanghai Volkswagen is based on an old Chinese proverb: 'Sailing against the current, if you don't advance, you will retreat.'" Only by summing up the past, innovating and developing, adapting to change, and making scientific decisions can we succeed again. ”
Mr. Chen also expressed the hope that Volkswagen of Germany can continue to give strong support in the independent development of products, export to foreign countries and the use of domestic spare parts.
Today, Volkswagen has done it.
The six words "in China, for China" are not only the continuation and evolution of "localization", but also the new vitality injected into the joint venture.
Joint venture: from assembling Santana, to 100% Chinese R&D
"If I travel to China now and visit the car companies there, I will meet almost everywhere the senior Chinese managers who started their careers in Shanghai Volkswagen training." Martin Post writes in his book.
If we say that the joint venture has made a contribution to the modernization of China's automobile industry from a "workshop" to a modern one in the past 40 years, the contribution to the manufacturing and supply chain system is obvious. Then, cultivating talents in China's auto industry and promoting China's social development are deeper values.
From the increase in the localization rate of Santana to the simultaneous introduction of Polo in the world; From the localized development of the Passat Lingyu to the local development of the "god car" Lavida; From the partner of the Beijing 2008 Olympic Games to the "Green Belt Action" public welfare forest, it has been consistent for ten years.
From "China Road, Volkswagen Heart" to "In China, for China", in fact, the three words "localization" have run through Volkswagen's 40-year development history in China.
Again, this is where we stand at the crossroads of change in the industry and talk about the value of joint ventures.
In the past two months, Audi and Volkswagen have signed cooperation agreements with SAIC Motor to launch the joint development of the Advanced Digitized Platform intelligent digital platform and SAIC Audi's new models, as well as the development of new plug-in hybrid and pure electric models with SAIC Volkswagen.
The product plans for these projects, starting in 2025 and spanning beyond 2030, will also be the key to Volkswagen's success in the Chinese market in the next five years.
Behind this choice, or a "bet", is Volkswagen's 40 years of experience and awareness in the Chinese market - the local production of global models such as Golf and Tiguan, together with products such as Lavida and New Bora, which are completely based on Chinese demand, constitute Volkswagen's success in China, and with China's leading position in the field of electrification and intelligence, the balance of success also needs to increase the weight of localized products.
The series of actions we see today may be starting from the 2016 Volkswagen and JAC discussions on the establishment of a new energy vehicle joint venture.
It's a forward-looking vision and a precautionary attitude.
Today's Volkswagen Anhui signed a joint venture agreement in 2017, and Volkswagen will achieve a 75% stake in 2020; In Anting, Shanghai, China's first MEB electric vehicle factory was established in 2018; In Changchun, the Audi FAW New Energy Joint Venture was established in 2020.
With the establishment of CARIAD China and VCTC, the cooperation with Horizon, Thunderda, and Muchuan Industrial Design, and the hand-in-hand with Xpeng Motors, we have gradually seen the blueprint for Volkswagen's future layout in China, as well as the redefinition of the word "joint venture".
The new logic and new value of "joint venture".
Before discussing the new logic of "joint venture", we should first understand some of the constant value of joint ventures.
The joint venture that grows together with China's reform and opening up is also the banner of China's opening up and win-win cooperation, and no matter how much the joint venture is today, it also has the interests of the Chinese shareholders, absorbing the employment of Chinese employees, and contributing to local and national tax revenue.
Of course, in order to realize these unchanged values, joint ventures need to find a new logic and open up again in these challenging times.
In fact, the localization of joint ventures is a long-term and continuous topic, and even as early as the 21st century, joint venture brands are no longer simply imported, but integrated global resources, and found or created the most suitable products for the Chinese market.
But in the face of current market changes, this is not enough.
That's why there will be VCTC, there will be a shift in the decision-making center to the east, there will be a technology platform that is 100% developed for the Chinese market, and there will be a new way of cooperation with Chinese partners.
"Joint venture" is changing from a single input in the past to a two-way rush today.
"China's electric vehicle market is dynamic and competitive, and it is of great significance for us to continue to strengthen our strategic cooperation with SAIC Motor and promote the electrification of SAIC Volkswagen's product portfolio. Volkswagen and its strong partners will further accelerate SAIC Volkswagen's transformation. ”
In the words of Ralf Brandstätter, Volkswagen Group's Managing Director for China and Chairman and CEO of Volkswagen Group China, we can read several key messages: the joint venture needs to be transformed, and the cooperation with SAIC will bring greater competitiveness.
Objectively speaking, in the past 40 years, in the joint venture, the Chinese side has contributed more to the coordination and cooperation of local affairs, manufacturing, marketing and marketing, and more like a "decoration" of a ready-made house in terms of products and technology. Now, the Chinese side can participate in the design and construction of the house from the ground up.
This is a step forward in localization, and it is also a new value found in the joint venture.
"We and our partners continue to empower SAIC Volkswagen with technology, adhere to market-oriented, technological innovation, win-win cooperation, uphold long-termism, continuously promote the high-quality and sustainable development of the mainland's new energy vehicle industry, and continue to contribute China's strength to the transformation and development of the global automotive industry, so that the influence of China's intelligent manufacturing can go to the world."
The words of Chen Hong, Secretary of the Party Committee and Chairman of SAIC, may better reflect this new logic and new value.
In the past, the global automotive industry drove China's development; Today, Chinese automobiles can also be the driving force behind the transformation of the global automotive industry.
This is the greater significance of the joint venture for the future.
Integrating high-quality resources from the world and China, and becoming a link between China and the global market, it not only has the opportunity to achieve commercial success in the market, but also serves as an experience reference for the transformation of multinational car companies and a channel and springboard for China's automobile industry and technology to go global.
It's a road that no one has ever traveled, but Volkswagen's courage and foresight remain the same as when the joint venture agreement was signed in Beijing 40 years ago.
Large corporate perspective
Martin Post's 1000 Days in Shanghai contains a description of life after his family moved to China, and although the living conditions were far less than his newly renovated apartment in Ingolstadt, it did not affect his two daughters' exploration of Shanghai and the befriending of Chinese employees.
This leads me to believe that when the Germans signed the joint venture agreement 40 years ago, they were expecting more than just the benefits of the potential market.
This is also the value that the joint venture shoulders, which is more important than the profit.
Now, the joint venture at the crossroads has another choice.
Just like the answer given by Volkswagen: true localization, efficient pace like a local brand, facing competition and responding positively.
This is, of course, a decision based on the rules of business, but it is more important to find a new direction for the banner of "joint ventures", because it is not just about profit per se.