Volkswagen AG and its Chinese joint-venture partners will invest more than 4 billion euros ($4.4 billion) next year to rev up electric-car production and add more SUVs to its lineup, defying broader industry woes.
“Of course, we closely watch the up- and down-turns of the new energy vehicle market,” VW China chief Stephan Woellenstein said in prepared remarks at the Guangzhou auto show. “Still, its ongoing long-term growth excites us, as our electrification accelerates.”
Sales of electric cars have slumped for months in China after the government reduced incentives and the economy continued to slow. The world’s biggest vehicle market is poised to experience its second consecutive annual decline this year after decades of growth, adding pressure on domestic and foreign manufacturers alike.
VW expects demand for cars in China to be little changed next year compared with 2019 and it plans to continue to add market share. “Almost every fifth car sold in China comes from our group, the highest level in five years,” Woellenstein said.
Increased electric-car offerings will be a key driver in VW’s expansion plan and the product category accounts for a majority of its expected investments. “We generally foresee spending more on new energy vehicles than on fuel cars,” Woellenstein said.
VW’s factory in Anting, near Shanghai, will start churning out pure electric cars in October next year. The German manufacturer kicked off production of the ID.3 hatchback at its domestic plant in Zwickau this month.
