Volkswagen Group China

Despite the challenges due to the Covid-19 pandemic and the semiconductor shortage, the Volkswagen Group defended its leading position in China in 2021 and further accelerated the shift to e-mobility.

BUSINESS DEVELOPMENT

The challenges of the Covid-19 pandemic and the shortage of semiconductors led to a fall in deliveries in the Volkswagen Group’s largest single market, despite high customer demand and full order books. Together with the Chinese joint ventures, Volkswagen Group China delivered 3.3 million vehicles (including imports) in the Chinese market in 2021 (−14.1%). While the volume brands were appreciably affected by the shortage of semiconductors, Porsche (+7.5%), Bentley (+40.0%) and Lamborghini (+54.8%) achieved new sales records. Audi sold 701 thousand vehicles on the Chinese market, with imported models up 53.9%. The Volkswagen Passenger Cars brand, including JETTA, delivered 2.4 million vehicles and, with a market share of 11.7%, remained the number one with Chinese customers despite the challenging environment. The Volkswagen Group maintained its market leadership in China with a market share of 16%.

The fully electric vehicle (BEV) segment was the fastest growing segment in China in 2021. Despite early challenges, the Group’s electrification strategy in China gained further momentum with the introduction of ten new NEV models, including seven BEVs. At 92.7 thousand vehicles, the number of BEVs delivered was more than four times the figure for 2020. This was primarily due to the new ID. models ID.3, ID.4 X and ID.4 CROZZ and to the ID.6 X and ID.6 CROZZ developed specially for the Chinese market. Customer communication was improved specifically for the ID. family and an agency-based sales model introduced along with a fully digitalized sales process, which is being very well received by Chinese customers.

In fiscal year 2021, Volkswagen laid the ground for continued future success in China: Volkswagen Anhui, the first majority-owned joint venture in China, will be the Group’s new e-mobility hub and our third MEB plant in China after Foshan and Anting. Another strategic step in 2021 was the establishment of VW Anhui Components Company, the first battery system plant to be owned by the Group in China.

In September 2021, the first premium vehicle from SAIC Audi rolled off the production line: the A7 L. This opened a new chapter in China for the brand with the four rings and further strengthened the proven, almost four-decades-old partnership between Volkswagen Group China and SAIC Motor. With SAIC VOLKSWAGEN and FAW-Volkswagen, Audi will further expand its leading role in China.

For the tech-savvy Chinese market, CARIAD has set out an ambitious growth plan for software and connectivity in China. A strategic road map for business in China between now and 2030 has also been defined, concentrating on innovation and strong local research and development. In future, the aim is to be able to more quickly offer products and services specially developed for Chinese customers and their needs. The focus will be on technology for connectivity and automated driving.

Our joint ventures produced a total of 2.9 (3.6) million vehicles in fiscal year 2021. The joint ventures produce a mixture of established Group models and those specially modified for Chinese customers (e.g. with extended wheelbases), as well as vehicles developed exclusively for the Chinese market (such as the Volkswagen Lamando, Teramont, ID.6 X, or ID.6 CROZZ).

The proportionate operating result of the joint ventures in the reporting year stood at €3.0 (3.6) billion. The negative impacts of pandemic-related lower unit sales and more intense market competition were offset by improvements in the mix and cost optimization.

The figures of the Chinese joint venture companies are not included in the operating profit of the Group as they are accounted for using the equity method. Their profits are included solely in the Group’s financial result on a proportionate basis.

ID. family