To achieve this impressive aim, the Group’s third joint venture in China, JAC Volkswagen, was founded in 2017 for the sole purpose of developing and producing electric cars.
Quota for electric vehicles
Growth in the field of electric mobility is also fueled by the attention the Chinese government is giving. By 2020 the fleet average fuel consumption is supposed to lie at five liters per 100 kilometers, and by 2025 consumption should drop to four liters. Fleets can only meet these targets if they have a high percentage of electric vehicles. To further advance e-mobility, an electric car quota was introduced. As of 2019, manufacturers that sell more than 30,000 cars a year in China must ensure that ten percent of them are electric. All cars in the quota category receive credit points. All-electric vehicles receive three to five points depending on their range, and plug-in hybrids receive two. China is also loosening its rules for foreign automotive corporations. Since 2018, manufacturers of electric passenger cars have been permitted to act independently on the Chinese market.
Trend_3: Digitalization and connectivity
High-speed Internet, AI-supported infotainment and other digital tools mark the third major trend among drivers in China, namely a high demand for digitalization and connectivity-related features in their cars. A study by the McKinsey consultancy showed that in-car connectivity is a make-or-break factor in purchasing decisions for thirty percent of customers.
A fourth and long-standing trend reflects the need for all seats in a vehicle to be both roomy and comfortable. Customers prefer models with large wheelbases: the above-mentioned Phideon boasts a length of 5.07 meters and a wheelbase of slightly more than three meters.
Three new factories
The Audi Group brand has also consolidated its activities in China into a joint venture. Founded in 1991, FAW-Volkswagen is headquartered in Changchun. FAW produces high numbers of the successful Jetta, Sagitar and Magotan models, but has also been making Audi brand cars since the mid-1990s. Its highest-selling model is the Jetta with more than 325,000 units sold. Like SAIC VOLKSWAGEN, FAW also runs its own component factories. To keep up with demand for both SUVs and – no less importantly – electric cars on the Chinese market, FAW-Volkswagen opened three new factories in 2018, one each in Qingdao, Foshan and Tianjin.