Volkswagen to take China-developed car technology to global markets

Volkswagen plans to use technology developed in China in cars sold in other markets, starting with South America, Reuters reported from Hefei on Wednesday. Until now, the carmaker kept the technology it built in China for cars sold in China.

The plan centres on VW’s Compact Main Platform and its China Electronic Architecture. Both were built at the group’s research centre in Hefei with Chinese partners. They will form the base of new models for developing markets, which VW calls the Global South.

The first of those cars will arrive in South America by the end of the decade. In addition, VW plans to ship more China-built Volkswagen and Jetta cars to South America and Africa over the next few years.

Southeast Asia is another possible destination, according to Reuters. For now, however, VW has ruled out selling China-developed models in Europe or North America.

“We call it in China, and beyond,” said Oliver Blume, Volkswagen’s chief executive, who described China as a key innovation engine for the group.

The electronic architecture was built with Chinese EV maker Xpeng. It is designed for software-defined cars, whose features are mostly run and updated through software. It works across several platforms and engine types.

VW also showed VEGA, a technology package that combines 850-volt fast charging with readiness for Level 3 automated driving, where the car can drive itself in some conditions. It is due to launch in 2027.

The company says building cars this way in China can cut development time by up to 30%. VW also wants its China arm, once a big source of profit, to become a cheaper base for design and exports. The change is part of the biggest overhaul in its 89-year history.

The shift comes as VW loses market share in China to local rivals such as BYD and Geely. Its partnerships with Xpeng and Horizon Robotics have not yet produced a commercial hit, Reuters reported.

The Chinese market is also getting harder. Ralf Brandstatter, head of VW’s China business, expects the country’s passenger car market to shrink by 20% this year, or about 4.5 million vehicles.