On March 16th, VW welcomed Ma Kai, Vice Premier of the State Council of the People’s Republic of China, and his entourage to its world headquarters in Wolfsburg, Germany.
Vice Premier Kai didn’t fly to Wolfsburg for the VW hotdogs. Instead, he met with VW CEO Martin Winterkorn and Jochem Heizmann, Member of the Board of Management of Volkswagen, to discuss VW’s upcoming initiatives, namely the automaker’s planned $23 billion investment in the People’s Republic.
The investment will help create advanced vehicles and powertrains, resource-conserving production operations, and “environmentally compatible technologies” in the country by 2019. The fruits of this labour will be VW’s “major electro-mobility campaign”.
Furthermore, the German automaker plans to introduce an onslaught of 20 new models with “alternative powertrains” in China by 2018. While the company’s press release didn’t detail exactly what will be under the hood of these new vehicles, it made clear that many of them will be produced locally.
“Volkswagen is committed to forging ahead with electro-mobility in China and to taking a leading role in technology and sales in this area by 2018,” said Winterkorn. And expectations are high. Volkswagen Group China expects to move “a six-figure” number of PHEV’s and BEV’s locally by 2020.
VW this year will open a new vehicle plant in Changcha and an engine plant Changchun to help account for the planned volume. The group also plans to add another two plants in Quingdao and Tianjin over the next two to three years.
To note, China is VW’s largest market by volume. The brand operates 19 production facilities and has sold almost 3.5 million vehicles in the country in 2014. It plans to churn out 5 million annually by 2019.
With a planned output of 5 million cars, a clear focus on innovation, and loads of potential employment opportunities, VW’s efforts in China could spell significant gains in its attempt to reach Strategy 2018.