Exclusive-Volkswagen’s China EV venture has no new models planned for next two years, sources say

BEIJING, Nov 11 (Reuters) – Volkswagen’s electric-vehicle joint venture in China has not planned any new models for 2027 or 2028, two people with knowledge of the situation said, after it banked on far greater demand for its ID. UNYX series than what has materialised.

Without new models, money-losing Volkswagen Anhui is stuck with a line-up that has not caught on with the young, urban consumers it targeted when it launched the UNYX marque in July 2024, in a market where automakers introduce models and variants on a monthly basis, with hundreds launched so far this year.

Management at Volkswagen Anhui believed its line-up was sufficient to establish the brand and drive sales through 2028, said one of the people, who spoke on condition of anonymity.

But sales of the four-car line-up have fallen short. To inject momentum, the venture partnered with Chinese EV peer Xpeng for the ID. UNYX 08 SUV, but sales since its April launch are far below target, Reuters reported last month.

Volkswagen was long reliant on China for growth and dominated the market for years before ceding ground to domestic rivals such as BYD. Against a backdrop of sweeping restructuring, it has cited weak Chinese performance as a reason behind its largest quarterly loss in over a decade.

Volkswagen Anhui had considered a crossover utility vehicle for 2028 but that is also on hold, one of the people said.

The lack of new models in the pipeline has not previously been reported.

In a statement to Reuters, Volkswagen China said it was focused on “ramping up and optimising” its Anhui venture’s dealer network to reach more customers and grow sustainably. It declined to comment on questions about product strategy.

Volkswagen’s China struggles are not helped by a shrinking market — sales are set to fall by 20% this year from last, showed data from the China Passenger Car Association (CPCA). Legacy automakers also have to contend with nimbler Chinese peers ramping up competition at home while gaining ground in Europe and beyond. 

In one positive sign for the automaker in China, Volkswagen said on Wednesday it sold a record 28,000 “new energy vehicles” in October, a more than four-fold increase on the previous year. NEVs include EVs and plug-in petrol-electric hybrids.

To help reverse its fortunes in China, Volkswagen partnered with Xpeng and self-driving chipmaker Horizon Robotics to develop platforms and technology that can also be exported.

The German automaker has three Chinese joint ventures. Volkswagen Anhui is a nine-year-old venture with JAC that is 75% owned by Volkswagen, and which has yet to turn a profit. It is set to break even by 2030, Volkswagen finance chief Arno Antlitz said at a quarterly earnings presentation.

‘AMBITIOUS’ PLAN

Volkswagen Anhui aims to build 33,000 UNYX series cars this year, showed an internal document dated late October that was reviewed by Reuters. Production volume was “constantly rising” in the face of tough market conditions, the document showed.

It sold 11,360 UNYX series vehicles over January-September, showed data from consultancy ThinkerCar.

Volkswagen has set what it called an “ambitious” plan to sell 128,000 UNYX cars next year, the internal document showed.

The German automaker sold more than 1.3 million vehicles in China over January-September, CPCA data showed. That represented a 30% fall from the same period a year earlier, versus a market decline of almost 22%.

Volkswagen China declined to comment on targets.

“Volkswagen Anhui is in the middle of a product offensive, with four models on the market and a pipeline that continues beyond this year,” it said in its statement.

The venture’s multibillion-dollar plant in Anhui, eastern China, is operating far below annual capacity of up to 350,000 vehicles, said two people with knowledge of the matter.

That factory also builds Cupra Tavascan SUVs for export, and plans about 33,000 this year, the internal document showed.

Volkswagen will introduce 30 NEV models in China through 2029, including from Volkswagen Anhui, which will also refresh ID. UNYX models to keep them competitive, Volkswagen China said.

(Reporting by Qiaoyi Li, Ju-min Park in Beijing and Zhang Yan in Shanghai; Editing by David Dolan and Christopher Cushing)