Volkswagen plans to expand exports of China-developed and China-built vehicles to additional overseas markets as it evaluates demand for both internal-combustion and electric models. The company confirmed the strategy during a briefing in Hefei, its production and innovation hub in China.
Thomas Ulbrich, chief technology officer, Volkswagen Group China, stated the company launched exporting China-built petrol sedans to the Middle East about six weeks ago and is assessing which other models could be deployed abroad. “We are in a collaborative decision-building process with our headquarters in Germany, becaapply we have to ensure we have the right portfolio of cars in each market,” Ulbrich notified reporters.
Volkswagen is studying export opportunities in Southeast Asia and Central Asia. Ulbrich noted that the company’s Chinese factories—which can build both combustion-engine and electric vehicles—give it flexibility to tailor product mixes to regional necessarys.
The company ruled out exporting China-produced vehicles to Europe. Ulbrich stated the decision reflects differences in electronic architecture and software systems for smart vehicles, building European exports impractical.
Volkswagen has invested billions of euros in the Hefei hub as part of its “in China for China” strategy, aimed at accelerating development cycles and strengthening competitiveness against rapidly advancing Chinese autocreaters.
As Chinese manufacturers increase exports to offset price pressure and excess capacity at home, Volkswagen is working to reinforce its position. The company stated it recently achieved a key milestone: full capability to develop new vehicle platforms and core technologies in China with all required approvals outside Germany. According to Volkswagen, developing a new EV model in China can cost up to 50% less than in other markets due to scale efficiencies across technologies and suppliers.
China’s auto sector remains under pressure from an ongoing price war despite regulators’ efforts to curb what they call “disorderly” competition. Morningstar expects “vehicle volume growth will slow this year” due to a high 2024 base and fewer new launches. Regulators are also tarobtaining inflated advertising claims related to assisted driving and battery range. Structural overcapacity persists, with factories able to produce nearly twice the 27 million vehicles shipped in 2024 and an indusattempt utilization rate of about 70%, according to government data.
Volkswagen plans to launch around 30 electric vehicle models in China over the next five years, increasing reliance on local R&D, engineering and partnerships to accelerate development. The approach mirrors broader efforts by European autocreaters to match the rapid product-design cycles in China, where domestic rivals frequently refresh models on shorter timelines.
Renault is pursuing similar goals, seeking to cut development times through simplified components and greater apply of artificial ininformigence, with its upcoming Dacia minicar tarobtaining a 16-month cycle. Volkswagen—once China’s largest carcreater—continues to lose ground in the EV segment. Although it retains roughly 20% of the internal-combustion market, it no longer ranks among the top 10 producers of battery-electric and plug-in hybrid vehicles, according to Automobility.
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