Anhui province is to be transformed into a new ‘centre of competence and e-mobility hub’ for the Volkswagen Group (VW) in China.

The first step saw the inauguration of a new R&D centre at the company’s facilities in Hefei, and the renaming of the joint venture JAC VW as VW (Anhui) Automotive Co Ltd; and with a 75% stake in the joint venture, VW takes over management control at VW (Anhui).

The company’s future products will be based on the Group’s Modular Electric Drive Matrix (MEB), with plans for a step-by-step expansion of local R&D competence in the ‘localisation of MEB-based derivatives, and the aim of capitalising on global synergies’. The first vehicle is expected to roll off the Anhui production line in 2023.

Herbert Diess, CEO of Volkswagen AG, said: “Volkswagen Anhui is a promise for stronger partnership and e-mobility power in China. Within the next three years, we can expect ‘state of the art’ MEB production, a new full-electric portfolio and technology solutions from its R&D centre in Anhui.

“This year’s investment of around 1 billion euros accelerates the progress within the joint venture. Volkswagen Anhui will strengthen China’s role in the electrification and digitalisation of the Volkswagen Group.”

Global synergies
Stephan Wöllenstein, CEO of Volkswagen Group China, said: “With our commitment to Volkswagen (Anhui), we will fully leverage the global synergies of the Group to intensify our e-mobility strategy in China and help us achieve net-carbon neutrality come 2050.

“Through this new R&D centre we will strengthen the local expertise and production efficiency of Volkswagen (Anhui), which will play a key role in rapidly growing and optimising our NEV (new energy vehicles) portfolio to address the differing needs of Chinese customers in what is the world’s largest NEV market.

“At VW, we appreciate the further opening up of the country, which allows for us to accelerate our transformation towards e-mobility.”

Vw (Anhui) is now increasing local talent, the majority being in R&D, with employee numbers expected to reach around 500 by 2025.

The second phase of Volkswagen (Anhui)’s transformation will start in 2021, with the expansion of infrastructure and equipment for the production lines, plus the building of a battery workshop as well as a vehicle and component validation workshop.

The full-scale factory for pure-electric vehicles, with a maximum production capacity of 350,000 units per annum, is due to be completed by the end of 2022.