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Source: Times Finance Author: Wu Kai

On the evening of July 17, Volkswagen Anhui released a new model ID.UNYX (Chinese name "与众"). As the first model launched by Volkswagen Anhui in the Chinese market, ID.UNYX is positioned as a compact pure electric SUV with a starting price of 209,900 yuan.

Image source: Times Finance

Volkswagen Anhui is the third complete vehicle joint venture of Volkswagen Group in China and the first joint venture in which Volkswagen holds a controlling stake in China. Volkswagen holds a 75% stake and aims to produce electric vehicles. According to previously disclosed information, Volkswagen Anhui aims to produce 200,000 to 250,000 vehicles in 2025, achieve sales revenue of 30 billion yuan, and is expected to reach 50 billion yuan in 2029.

The first new car starts at 209,900 yuan

Volkswagen ID.UNYX is positioned as a compact pure electric SUV, adopting a new Coupe SUV coupe shape, with a body size of 4663×1860×1610mm and a wheelbase of 2766mm. A total of three models are launched, of which the Pro and Ultra versions have a range of 621 kilometers and are priced at 209,900 yuan and 229,900 yuan respectively; the Max version has a range of 565 kilometers and is priced at 249,900 yuan. All new cars are equipped with CATL ternary lithium batteries.

Image source: Times Finance

The compact pure electric SUV market where Volkswagen ID.UNYX is located is extremely competitive. The sales of models such as BYD Song PLUS EV, BYD Yuan PLUS, and GAC Aion Y have long been at the forefront, and the monthly sales of the three models are all over 10,000 units.

In comparison, the price of Volkswagen ID.UNYX is higher than the above-mentioned best-selling models, such as BYD Song PLUS EV, which starts at 149,800 yuan. At the same time, its price is also higher than Volkswagen's ID.4 CROZZ and ID.4 X, two models of the same level, which are priced between 139,800 and 237,400 yuan.

It is worth mentioning that Volkswagen Anhui’s sales system is independent of the original FAW-Volkswagen and SAIC Volkswagen. It is managed by Volkswagen (Anhui) Digital Sales Service Co., Ltd. and adopts a channel network of direct sales + agency model.

By the end of 2024, Volkswagen Anhui will open four directly-operated ID. Experience Centers across the country, covering Beijing, Shanghai, Guangzhou, and Chengdu. At the same time, its retail network will cover more than 20 cities, mainly first- and second-tier cities. By the end of 2025, the sales network will cover more than 70 cities and expand from first-tier to third-tier cities.

The independence of the sales system comes from the uniqueness of Volkswagen Anhui.

Volkswagen Anhui is the third complete vehicle joint venture of Volkswagen Group in China. The company can be traced back to 2017, when Volkswagen Group launched its electrification strategy in China and jointly established JAC Volkswagen Automotive Co., Ltd. (JAC Volkswagen) with JAC Motors in Anhui.

In 2020, Volkswagen China's shareholding ratio increased to 75%, and JAC Volkswagen was officially renamed Volkswagen (Anhui) Co., Ltd. (ie "Volkswagen Anhui"), which has been 4 years. In terms of investment, the two major shareholders have invested more than 30 billion yuan in total.

Different from the two major joint ventures, FAW-Volkswagen and SAIC Volkswagen, Volkswagen Anhui is Volkswagen Group's innovative work in the development of electrification in China. It is not only Volkswagen's first joint venture in China focusing on electric vehicles, but also Volkswagen's first controlling joint venture in China for complete vehicles.

Volkswagen Anhui is also the vehicle for the cooperation between Volkswagen Group and Xiaopeng Motors.

In April 2024, Volkswagen announced that in order to accelerate the transformation of its business in China, the group will invest 2.5 billion euros (about 19.8 billion yuan) to further expand the production and innovation center in Hefei. While strengthening local R&D capabilities, it will also produce two Volkswagen brand models jointly developed with Xiaopeng Motors in Hefei. The first model is a mid-size SUV, which is scheduled to go into production in 2026.

Can it boost Volkswagen’s sales in China?

The arrival of Volkswagen Anhui and ID.UNYX comes at a time when joint venture brands are experiencing declining sales in China.

Since 2020, with the rapid development of the domestic new energy vehicle industry, domestic brands have risen rapidly. In the first half of this year, the cumulative sales share of domestic brands has reached 57%, an increase of 7 percentage points over the same period last year. On the contrary, the sales of domestic joint venture brands, led by Volkswagen and Toyota, have shown an overall downward trend.

In the view of many industry insiders, the slow transformation to electrification is one of the main reasons why most joint venture brands have fallen into decline in China.

In comparison, Volkswagen's electrification transformation has achieved certain results. Before the ID.UNYX was launched, Volkswagen (including the Audi brand) had 10 pure electric models on sale in China. At the same time, the sales of Volkswagen ID series pure electric models are good. In June this year, the domestic sales of this series of models exceeded 15,000 units, which is higher than other joint venture brands.

However, as the basic market of fuel vehicles shrinks, Volkswagen's overall sales in China continue to decline. According to the China Passenger Car Association, FAW-Volkswagen's domestic retail sales in the first half of the year were 771,459 vehicles, down 8% year-on-year; SAIC Volkswagen's retail sales in the first half of the year were 510,878 vehicles, down 4.1% year-on-year.

Faced with the above situation, Volkswagen has repeatedly stated that it will increase investment in China and improve the layout of electric vehicle models.

Blume, Chairman of the Board of Management of Volkswagen Group, said at the beginning of 2024 that Volkswagen's goal is to continue to maintain its position as the number one international automaker in China and become one of the top three automakers in the Chinese market. According to the plan, by 2030, Volkswagen Group's brands will offer more than 30 pure electric models in the Chinese market.

However, there are recent reports that Volkswagen will postpone the release of several pure electric models due to the development progress of Cariad, a software company under Volkswagen. In response to this, Cariad responded to Times Finance that it would not comment.

In the industry's view, Volkswagen Anhui will shoulder the heavy responsibility of Volkswagen's electrification transformation in China and boosting sales in China.

Meng Xia, CEO of Volkswagen Passenger Cars China, said that by 2026, the group will also develop no less than four electric models based on the Volkswagen Anhui electric platform. In addition, Volkswagen Anhui is committed to becoming the Volkswagen Group's layout in Hefei, covering production, R&D and procurement functions, and will expand into a strategic innovation center of the group "in China, for China".

With the improvement of the layout of pure electric models, Volkswagen is expected to show stronger competitiveness in China's new energy vehicle market. As for whether Volkswagen can increase its sales in China, it remains to be seen.