Volkswagen China EV venture has no new models planned for 2027-2028
Volkswagen's EV joint venture in China has no new models planned for 2027 or 2028, sources say. The ID. UNYX series has underperformed amid a shrinking market and fierce competition from domestic rivals. The venture is operating far below capacity and has yet to turn a profit.
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. 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.
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 per cent 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.
Volkswagen Anhui aims to build 33,000 UNYX series cars this year, showed an internal document dated late October. 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 venture's multibillion-dollar plant in Anhui is operating far below annual capacity of up to 350,000 vehicles, said two people with knowledge of the matter. The German automaker has three Chinese joint ventures. Volkswagen Anhui is a nine-year-old venture with JAC that is 75 per cent 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.