German carmaking big Volkswagen Group mentioned Thursday it will make investments 2.5 billion euros (USD 2.7 billion) to broaden its operations in China because it tries to stop a gross sales slide in its most essential market.
Volkswagen held the title of best-selling model on the earth’s largest auto marketplace for years till 2023, when it misplaced its crown to homegrown electrical car maker BYD.
Globally, the group has invested tens of billions in its personal pivot to EVs, which in China included taking a minority stake in producer XPeng final yr.
The brand new multi-billion-euro funding will probably be used to additional broaden Volkswagen’s manufacturing and innovation hub in Hefei, within the jap province of Anhui, the group mentioned in a information launch.
That can enhance its analysis and growth capability and also will help preparation for 2 automotive fashions being developed with XPeng, it mentioned.
“With our ‘In China, for China’ technique, we’ve a robust plan and are accelerating the realignment of our enterprise, with extra buyer focus, extra pace and extra native growth,” govt Ralf Brandstaetter mentioned within the assertion.
“This extra funding within the (Hefei) website underlines our ambition to rapidly broaden our native progressive energy.”
China’s marketplace for EVs dwarfs the remainder of the world.
Of all new EVs offered globally in December final yr, 69 p.c had been in China, in line with the analysis agency Rystad Vitality.
The battle for such a prized market options each established worldwide and home carmakers, in addition to more moderen upstarts akin to smartphone and equipment maker Xiaomi.
Volkswagen has a 40-year historical past in China and calls itself an “integral a part of the Chinese language industrial ecosystem”.
Outcomes launched by the group final month confirmed that its gross sales grew modestly in China final yr however at a slower price than in 2022.
Its world outlook for 2024 was additionally subdued.
 to expand its operations in China as it tries to prevent a sales slide in its most important market. The new multi-billion-euro investment will be used to further expand Volkswagen's production and innovation hub in Hefei, in the eastern province of Anhui, the group said in a news release.){kind=link}