Photo provided by Volkswagen

Volkswagen announced on April 18 that it will invest approximately 1 billion euros to establish a R&D, innovation and procurement center for intelligent connected electric vehicles in Hefei.

According to Volkswagen, the new entity, with a project name of 100% TechCo, will focus on vehicle development, component development, and procurement functions to enhance the collaborative effect in the development process and introduce advanced local technologies into the early stages of product development, so as to better respond to the needs of Chinese customers and promoting faster product launches.

"Volkswagen will hold a 100% stake in the new company," Volkswagen Group's Chairman Oliver Blume said to National Business Daily (NBD). The reason why Volkswagen establishes a new company is because the carmaker sees the rapid development of the Chinese automotive market and hopes to run faster in the new race like an athlete.

"China is an innovation-driven market, and we need to accelerate the pace. This includes expanding our engineering and software development capabilities, improving Volkswagen's independent decision-making ability in the Chinese R&D system, shortening decision-making processes, and increasing localization efforts," Blume told NBD. With the operation of 100% TechCo in 2024, the development cycle of Volkswagen's new products and technologies will gradually shorten by about 30%.

"Local suppliers will be able to participate in the early stages of product development and integrate the most advanced technologies and application solutions into new products. In addition, through the new company, the R&D projects of SAIC Volkswagen, FAW-Volkswagen, and Volkswagen Anhui will achieve closer collaboration," Blume said. The new company will work with CARIAD to establish a cooperation mechanism and play a collaborative effect. CARID is a software company under Volkswagen Group.

"In this era of great changes in the automotive industry, it is very important to move forward with an open attitude and partners," Blume said. 

It is reported that the new company will be put into operation in early 2024 and will have more than 2,000 employees in the procurement and R&D fields. Marcus Hafkemeyer, Chief Technology Officer of Volkswagen Group (China), will serve as the CEO of the new company.

Marcus Hafkemeyer revealed that the first step of 100%TechCo will coordinate the development of Volkswagen Anhui's MEB platform models and be responsible for developing functions and modules of platforms focusing on electric commute and meeting the needs of the Chinese market. "The new company will play a key role in the development process of the new Volkswagen models slated for launch in 2024."