On September 3, 2026, the AUDI Innovation & Technology Center (AITC) officially opened in Shanghai. Jointly established by AUDI AG and SAIC Motor as a new joint venture, the R&D facility is dedicated to the AUDI brand and equipped with end-to-end, full-vehicle development capabilities.
Its opening comes at a pivotal point for AUDI. The brand has made its debut, while the AUDI E5 Sportback and E7X have already entered the market. For Audi and SAIC Motor, the focus of their partnership is now extending beyond bringing new models to market. The longer-term task is to turn rapid responsiveness to the Chinese market into a set of capabilities that can support continuous product development, consistently safeguard quality and create meaningful differentiation.
What sets AUDI apart goes far beyond replacing the iconic Four Rings with a new letter-based identity. In a recent interview with Gasgoo, Fred Schulze, CEO of Audi and SAIC Cooperation, said: "AUDI was born in China, developed in China and produced in China, with products tailored for the Chinese market."
This means that product development no longer begins with an existing global vehicle model to which China-specific features are later added. Instead, Chinese customers' aesthetic preferences, usage scenarios and expectations for intelligent technologies are considered from the product-definition stage. The E5 Sportback and E7X have already brought this approach into production vehicles. The role of AITC is to provide a more stable organizational foundation for the products that follow.
A local R&D entity is essential to this model because the Chinese market is changing too quickly for imported products and partial localization alone to keep pace. Expectations for intelligent cockpits, advanced driver assistance systems and artificial intelligence solutions continue to evolve. Nor does development end when a vehicle reaches the market: many features must be continuously refined through OTA updates over the vehicle's entire lifecycle. Responding at this speed requires a shorter path from identifying customer needs and defining the product to developing the technology and delivering the finished vehicle.
AITC will focus on intelligent electric technologies and full-vehicle development, including vehicle dynamics, AI-enabled cockpits and next-generation advanced driver assistance systems. Audi and SAIC Motor also plan to jointly develop four new AUDI models based on the Audi ADP 2.0 (Advanced Digitized Platform), with the first scheduled to arrive in 2028.
This roadmap suggests that AITC is not a project team created around a single model. It is a long-term organizational commitment intended to strengthen AUDI's local capabilities across an expanding product portfolio.
China speed, however, cannot simply mean compressing development timelines. In Schulze's view, the pace of technological and functional iteration must increase, but safety, design and quality standards cannot be compromised. "Safety and quality are fundamental customer expectations and the bottom lines we must uphold," he said.
Within those boundaries, AUDI plans to use OTA updates to accelerate improvements to advanced driver assistance systems, artificial intelligence solutions and technologies available throughout the vehicle lifecycle. True system capabilities therefore involve more than responding quickly to market change. They also require the company to maintain consistent standards and delivery quality as development accelerates.
Beyond speed and quality lies another question: as automakers increasingly draw on the same supply-chain resources, where will meaningful product differentiation come from? Many intelligent EV manufacturers now work with identical or similar technology suppliers, making it difficult to create a distinct product identity through supplier selection alone. As Schulze put it, "Even when different automakers work with the same supplier, they do not necessarily arrive at the same solution."
AUDI's approach is to move the starting point of differentiation forward to the product-definition stage. The company first determines whom a product is intended to serve, which usage scenarios it should cover, and what kind of driving and interaction experience it should deliver. It then works with suppliers to translate those objectives into concrete solutions.
A suspension system, for example, may come from the same supplier, but different product positioning and development targets can still produce distinctly different driving experience. Suppliers provide the technological foundation; the ability to combine those technologies into a recognizable product experience remains with the automaker and depends on its own product-definition and integration capabilities.
Ultimately, this approach to product definition and technology integration must be validated by the choices customers make. AUDI's first two models have provided some encouraging early indications. According to Schulze, more than 80% of E5 Sportback customers had also considered Chinese EV start-up brands. This suggests that AUDI is beginning to reach the new customer group it has targeted and is entering the consideration set of China's intelligent EV buyers.
More than 60% of E7X customers, meanwhile, chose the quattro version. The figure indicates that, alongside intelligent features, driving performance remains an important part of AUDI's appeal. "This market feedback shows that we have identified the right target customers," Schulze said.
The next challenge is to convert the attention generated by individual models into lasting brand recognition while gradually scaling the business. Schulze identifies three core measures: brand awareness, brand likability and sales. Together, they trace the journey from knowing the AUDI brand and developing an affinity for it to ultimately choosing one of its products. As more models arrive and the dealer network expands, AUDI will need to move beyond successful product launches and build the foundations for sustained brand and business growth.
In this edition of C Talk, Schulze also discusses AUDI's long-term commitment to China and the priorities shaping its next phase of development. Watch the full interview for the complete conversation.
