Volkswagen Group to invest €2.5 billion in production, innovation center in Hefei city

Beijing (Gasgoo)- On April 11, 2024, after 40 years of development in the Chinese market, Volkswagen Group reemphasized its commitment to providing high-quality localized models for Chinese customers. It is investing €2.5 billion to expand its production and innovation center in Hefei, Anhui province. 

Photo credit: Volkswagen

With the rapid development of electric and connected vehicles in China, the group is accelerating its business transformation in the country, actively implementing the "In China, For China" strategy. It continues to deepen localization development processes, tailoring products to evolving customer needs. To this end, the group aims to strengthen its local R&D capabilities, and produce two Volkswagen-branded models jointly developed with XPENG, with the first model being a mid-size SUV slated for production in 2026.

These new models will expedite the electrification process of the group's product lineup in China. By 2030, Volkswagen Group's brands will offer over 30 pure electric models in the Chinese market. 

Volkswagen China Technology Co., Ltd., the group’s wholly-owned subsidiary located in Hefei, serves as the hub for implementing product localization. It will closely collaborate with the group's joint ventures in China, undertaking core R&D tasks. The company is developing the group's first electric vehicle architecture tailored for the Chinese market (CMP). Starting in 2026, the group will leverage this platform to develop at least four electric models targeting the compact entry-level vehicle market.