Volkswagen, the German auto giant, has announced plans to invest approximately 1 billion euros ($1.1 billion) in a new company called “100%TechCo” in Hefei, Anhui province, eastern China. The company aims to focus on the development, innovation, and procurement of smart connected electric vehicles, with functions including vehicle and component development. The new company is expected to reduce the development time for new products and technologies by around 30%, according to Volkswagen.
The 100%TechCo is set to become operational in early 2024, and it will employ more than 2,000 people from procurement and R&D. The new CEO of the company will be Marcus Hafkemeyer, Chief Technology Officer of Volkswagen Group China. The company will integrate advanced technologies from local suppliers at an early stage of product development, enabling model offerings to be more responsive to Chinese customer needs.
Volkswagen’s move is seen as a milestone in its “in China for China” strategy. The new company will help bring Volkswagen’s joint ventures in China — SAIC Volkswagen, FAW Volkswagen, and VW Anhui — into closer synergy with their R&D programs, optimize profitability, and help the automaker stay relevant in the world’s most competitive electric vehicle market.
At the Shanghai auto show, Volkswagen Group brands showcased 20 electric models, including the ID.7, which made its world debut. The company plans to have more than 30 all-electric models across its brands by 2030.
As the world transitions to cleaner energy, Volkswagen’s investment in the Chinese market highlights the importance of localization for global automakers to stay competitive. The establishment of 100%TechCo will enable Volkswagen to integrate advanced technologies and innovations from local suppliers in China and offer more responsive products to Chinese customers.
