The Volkswagen Group is one of the earliest and most successful international partners of China’s automobile industry. The Volkswagen Group established contacts with China as early as 1978. In October 1984, SAIC Volkswagen Corporation Ltd., Volkswagen Group’s first joint venture in China, laid its foundations in Shanghai.
In February 1991, FAW-Volkswagen Corporation Ltd. was established in Changchun, creating the Volkswagen Group’s second joint venture in China. In 2017, the Volkswagen Group launched a new joint venture with Anhui Jianghuai Automobile Group Corp., Ltd. for electric mobility in China. In December 2020, the joint venture was renamed as Volkswagen (Anhui) Automotive Company Limited, after the Volkswagen Group increasing its stake in the company to 75 %.
The business scope of the Volkswagen Group in China includes the production, sales and services of complete vehicles and parts, such as engines and transmissions. Some of the Group motor brands – including VGIC, Volkswagen Passenger Cars Brand, Audi, ŠKODA, Porsche, Bentley, Lamborghini, Volkswagen Commercial Vehicles, MAN, Scania and Ducati – have a business presence in China through Volkswagen Group China and its subsidiaries. In 2020, Volkswagen Group China delivered 3.85 million vehicles to customers in the Chinese mainland and Hong Kong, together with its Chinese joint venture partners. As of the end of 2020, Volkswagen Group China has a total of 96,974 employees.
As China’s most dependable partner, Volkswagen not only provides high-quality products and reliable services to Chinese customers, but has also actively supported a wide range of Corporate Social Responsibility (CSR) projects traversing Environmental Protection, Sustainable Mobility, Sports Development, Arts & Culture, and Social Care. After establishing a CSR fund with an initial amount of RMB 50 million in 2014 and a further increase of an additional RMB 50 million in 2016, Volkswagen Group China announced in 2018 that it would substantially increase that commitment with a further RMB 100 million for social responsibility projects.
The three highlight projects 2020
“Despite the circumstances, we have achieved substantial progress in our operations. A strong product portfolio together with an increasing focus on a digital approach to marketing and the purchase journey have ensured continued progress in a difficult year.”
Volkswagen Group China Maintains Position as No. 1 Choice for Car Customers in China
In 2020, together with its joint venture partners, Volkswagen Group China delivered 3.85 million (4.23, -9.1 %) vehicles to customers in Mainland China and Hong Kong, including 170,700 imported vehicles. Unprecedented challenges posed by the COVID-19 pandemic saw a drop in the total market to around 20 million units, representing a decline of roughly 6 %. Volkswagen Group China has maintained its position as the number one choice for car customers in China with a market share of 19.3 %.
“For 2021, we expect positive growth of deliveries ahead of the total market, and to increase our market share over the course of the year. However, in the first months of this year the shortage of semi-conductors will cause a delay in deliveries. Still, we are optimistic in recovering from the impact of this delay over the following months. A total of 25 new models will be launched in 2021, which will act as a strong driver of growth. These will include 13 NEVs, some of which will be among our 14 new SUVs to be launched. During 2021 the Group will be accelerating our journey into the era of electric mobility and paving the way to the goal of a carbon neutral future,” said Dr. Stephan Wöllenstein, CEO of Volkswagen Group China.
The Volkswagen brand, and its JETTA sub-brand, delivered almost 2,851,100 vehicles in Mainland China and Hong Kong in 2020. The brand has maintained its position as the number one choice for Chinese car buyers despite the market downturn. Volkswagen continues to provide Chinese consumers with an even greater selection of SUVs, having extended its portfolio to 11 models and seeing deliveries of over 805,500 from January to December, accounting for 29.9 % of the brand’s total sales (2019: 26.0 %). The brand’s electric mobility offensive is picking up speed, having achieved deliveries of over 52,300 NEVs to Chinese customers throughout the year, representing a year-on-year increase of 36.0 %. The JETTA sub-brand saw deliveries of over 150,000 units, accounting for almost 1 % of the world’s biggest auto market.
Audi, despite the impact of the COVID-19 pandemic, sold 727,400 units in the Chinese mainland and Hong Kong, up 5.4 % year-on-year, the highest annual sales total in Audi’s more than 30-year history in China. It was also the fifth consecutive year that Audi has set new sales records. The brand also had a record year for models such as the Audi Q8, Audi A6L, Audi Q5L, Audi Q2L and Audi e-tron in 2020.
ŠKODA delivered 173,000 vehicles to its Chinese customers in 2020, representing a year-on-year decrease of 38.7 % (2019: 282,000). To recover from the impact of the epidemic, ŠKODA put specific focus on its SUV model range, which brought positive effects; the SUV sales share of its fleet increased by over 10 % in 2020 compared with the previous year. The most important key initiative in 2021 will be the local launch of the brand’s new generation of their global bestseller – the OCTAVIA.
Porsche delivered 89,000 new cars to Chinese customers with an increase of 2.6 % year-on-year in 2020. China continues to be Porsche’s largest single market in the world. In the fourth quarter, Porsche delivered 26,100 vehicles in China, up by 16 % year-on-year, contributing significantly to its full-year sales performance in China. The two-door sports car market in China has been growing rapidly. The delivery of the new 911 volume increased by 70 % year-on-year in 2020, while the mid-engine sports car 718 increased by 50 % year-on-year.
COVID-19 Relief Support by Volkswagen Group China and Joint Ventures
In February 2020, Volkswagen Group China and two of its joint ventures made a united effort to collectively donate RMB 120 million in support of COVID-19 relief work. The donation was made by Volkswagen Group China and its brands, such as Volkswagen, Audi, ŠKODA, Porsche and Bentley, together with its Chinese joint ventures, FAW-Volkswagen and SAIC VOLKSWAGEN.
“The current situation concerns us, and we would like to express our deepest gratitude to the hardworking and determined people on the front line of disaster relief. They have our full commitment and support,” said Dr. Stephan Wöllenstein, CEO of Volkswagen Group China. “For us at the Volkswagen Group, China is our second home. In times like these, we must stand together as one and take all necessary measures to assist the Chinese people wherever needed.”
The overall donation was used to combat the coronavirus. It went toward securing medical supplies and providing urgently needed aid, such as protective equipment, medical equipment, medicine, and other materials, to hospitals across Hubei Province and other Chinese provinces facing a serious situation. As part of the RMB 120 million donation, the Group donated RMB 10 million to support COVID-19 relief work at around 23 hospitals across Hubei Province with ventilators, blood gas analyzers, ECG machines, and other medical equipment that were in urgent need. Meanwhile, RMB 25 million (including RMB 10 million from Audi China) was donated to support more than 320 hospitals across Hubei Province with medical surgery masks, protective suits, pulse oximeters, as well as other medical equipment in need. The COVID-19 relief support by Volkswagen Group China substantially supported the Chinese society in combating against the COVID-19 pandemic.
Besides this, Volkswagen Group China’s operations steadily returned to normal levels, resuming its full capacity of business and production. In April 2020, Volkswagen Automatic Transmission’s production site in Tianjin began to produce masks to be distributed to Volkswagen production plant employees all over Europe, helping to ensure a healthy working environment while factories resume production.
Volkswagen Group China Moving Toward Carbon Neutrality Goals through its Electric Mobility Strategy and Climate-friendly MEB Production
In September 2020, Volkswagen Group China announced that it is planning to invest a total of roughly EUR 15 billion together with its joint ventures – SAIC VOLKSWAGEN, FAW-Volkswagen and JAC Volkswagen (later renamed as Volkswagen (Anhui) Automotive Company Limited) – in electric mobility between 2020 and 2024. The figure comes on top of the EUR 33 billion already announced by the Group for the development of electric mobility around the globe. Pursuing a strategy of electrification and digitization, the Group will electrify China on a grand scale, producing a total of 15 different NEV models locally by 2025, with 35 % of the product portfolio in China made up of fully-electric models. By November 2020, local production of the Modular Electric Drive Kit (MEB) was underway at the Group’s Foshan and Anting facilities, with a combined annual capacity of up to 600,000 units.
The Anting MEB plant is the Volkswagen Group’s first greenfield MEB plant anywhere in the world, and is 100 % dedicated to the manufacture of pure-electric vehicles. It has 28 energy-saving and eco-friendly measures, including solar photovoltaic power generation, improved heat-exchange systems, intelligent light controls and waste management, as well as rainwater recycling. As a result, energy use, water use, carbon dioxide waste, volatile organic compounds (VOCs) and general waste have each been reduced by 20 % compared to other vehicle plants of a similar size. The Anting MEB plant integrates intelligent manufacturing, energy conservation and environmental protection, and is now one of the largest and most efficient battery electric vehicle plants in China.
The Foshan plant was revamped on the site of original production facilities as one of the most flexible plants in the global production network. The plant adopts environmentally friendly procedures and green management measures throughout the whole production process to ensure all MEB vehicles are produced with renewable energy. Furthermore, 200,000 square meters of solar panels have been installed to provide the factory with 8.2 MW of power and an overall production of 9,000 MWh per year of renewable energy. This leads to a saving of 7,900 tons of CO2 per year. Thanks to a water recycling system, 44 % of the water used in the production process is recycled. With a series of upgrades and modifications to the MEB factory, 100 % of the plant’s energy consumption is already covered by renewable energy resources, making the production process CO2-neutral.
Volkswagen Group’s MEB production facilities in China set a new standard for others in the industry to follow, representing the start of a new approach to large-scale automotive manufacturing. Greener, more efficient, more productive, safer and more sustainable – these facilities point to the future and herald a new and electrified, low-carbon era for the Group.
Being aware of our internal and external stakeholders’ needs and expectations is a crucial prerequisite for business success. Volkswagen Group China actively seeks out and maintains dialogs with our stakeholders.
Stakeholders include governmental organizations, public organizations, international organizations, non-governmental organizations, local communities, business partners, customers, suppliers, employees, analysts and investors – a network of relationships that is expanding in parallel with our market presence.
- Volkswagen Group China awarded “Top Employer” in 2020.
- SAIC VOLKSWAGEN awarded “Top Employer” in 2020.
- FAW-Volkswagen awarded “Top Employer” in 2020.
- Volkswagen Automatic Transmission awarded “Top Employer” in 2020.
- Volkswagen Finance (China) awarded “Top Employer” in 2020.
- Volkswagen Group China awarded “2020 Special Contribution Award for Philanthropy”.
- Volkswagen Group China awarded “2020 Annual Charitable Enterprise”.
- Volkswagen Group China awarded “2020 Golden Sail Award for CSR”.