VW: From Transformation to Acceleration

Volkswagen announced a new development strategy, which will accelerate its transformation to a software-driven mobile service provider while working towards electrification. The integration of software into cars and digital customer experience are expected to become the core competitiveness of Volkswagen in the future.

It is against the backdrop of unprecedented changes in the automotive industry in a century, major auto companies have ushered in a critical moment of transformation in the beginning of the third decade of the new century. In order to obtain sustainable, long-term and stable business development, electrification and automation strategies have become the main directions for the future development of major auto companies, and Volkswagen is no exception.

A few days ago, Volkswagen announced the "From Transformation to Acceleration" strategy, indicating that the electrification offensive in the future will be further accelerated, while accelerating the transformation to a software-driven mobile service provider. "In the next few years, we will change Volkswagen in an unprecedented way." said Ralf Brandstatter, CEO of Volkswagen.

Accelerate electrification, achieve carbon neutrality by 2030

Since the launch of the ID.4 series, Chinese consumers have for the first time experienced the fruits of Volkswagen's electrification at the product end where the brand is most accessible. As an electrified product under the MEB platform, the ID.4 series demonstrates the true endurance of the MEB platform and the large space brought by the long wheelbase and short front suspension.

Prior to this, the Volkswagen ID.3 series, as a global model, has been launched on the European market in September 2020 and quickly surpassed the Tesla Model 3, becoming the highest-selling pure electric model in the European market, with outstanding results. . In the future, this model will also be produced at the Volkswagen joint venture plant after being introduced into China.

Another blockbuster new car ID.6 will be unveiled at the Shanghai Auto Show in April and is expected to be officially launched in the third quarter. Combined with previous reports, the car is based on the previously released Volkswagen ID.ROOMZZ concept car and is positioned as a medium and large pure electric SUV.

Ralf Brandstatter said that the Volkswagen ID.3 and Volkswagen ID.4 that have been delivered in the European market can be upgraded by OTA, and the new version is codenamed ID.2.1. At the same time, all new Volkswagen ID. family models produced in the past 8 weeks will be equipped with Volkswagen ID.2.1 version system.

Starting in the summer of 2021, Volkswagen will provide regular OTA services for owners of Volkswagen ID. family models, once every three months. It is expected that the Volkswagen ID.4 that will be delivered to the Chinese market will be equipped with the latest Volkswagen ID.2.1 or higher version system, and also support OTA upgrades. OTA upgrades not only include software performance optimization, but also the introduction of new functions and customized services.

In Volkswagen's most important Chinese market, Volkswagen has launched MEB platform production lines at Volkswagen's factories in Anting and Foshan, and has planned a total annual production capacity of up to 600,000 vehicles. At the same time, it invested 1 billion euros to invest in Jianghuai Automobile Holdings, and increased its share of electric vehicle joint venture JAC Volkswagen to 75% to obtain management rights. Volkswagen's Anhui plant plans to produce 350,000 vehicles per year, and its first model is scheduled to be put into production in 2023.

Ralf Brandstatter predicts that by 2030, the Volkswagen brand will account for more than 70% of the market share of pure electric vehicles in Europe, which is twice the previously planned target of 35%. In the United States and China, the electric vehicle market share will exceed 50% during the same period. The ultimate goal is to hope that Volkswagen can achieve complete carbon neutrality by 2050.

Of course, in the recent period, internal combustion engine products will also develop in parallel with the acceleration strategy of electric vehicles. All core models including Golf, Tiguan, Passat, TAYRON and T-ROC will continue to be updated. Ralf Brandstatter said that internal combustion engines will have a period of transition, but they should be as efficient as possible. The pure electric cruising range of plug-in hybrid models will be above 100km.

Develop autonomous driving and accelerate the transformation to a software-driven mobile service provider

In addition to continuing to make efforts in the field of electrification, Volkswagen will continue to cultivate in the fields of autonomous driving and digitalization, and continue to improve the operational efficiency of the company.

According to reports, in the future, Volkswagen will provide customers with personalized travel packages while lowering the entry barrier for personal travel by transforming traditional cars into software-based digital products. In other words, Volkswagen’s goal is to bring in additional revenue over the life of the vehicle through charging and energy services, through subscription to customer function software or through the purchase of autonomous driving.

In terms of autonomous driving, starting from Trinity in 2026, Volkswagen will take the lead in establishing a fully networked fleet neural network in the Volkswagen Group. At that time, vehicles will constantly exchange data-such as traffic conditions, obstacles or accidents. As a result, Volkswagen will establish a self-learning system with millions of cars, and customers of all group brands will benefit from it.

In terms of finance, Volkswagen is expected to invest 16 billion euros in accelerating transformation and further improving operational efficiency by 2025. It is expected that by 2023, it will achieve at least a target operating profit margin of 6% and ensure a long-term profit margin. To achieve this goal, Volkswagen is seeking to reduce fixed costs by 5% by 2023, increase factory productivity by 5% each year, and optimize material costs by 7%.

Summary: From these results and plans, it is not difficult to see that as a powerful player in the era of fuel vehicles, Volkswagen has embarked on a "radical" strategic transformation with only one goal, which is to become the industry leader in the unprecedented changes in the automotive market in a century. Whether it is possible or not, time talks.