Volkswagen needs to dispose of the internal combustion engines it no longer sells in China, and it has already found a way to do so.
Volkswagen is considering assembling some of its models developed in China in Turkey. With this move, the German company aims to utilize its excess production capacity in that Asian country and offset its lower sales volume in the region. To this end, it has signed a letter of intent with Dogus Otomotiv to explore the possibility of assembling vehicles using CKD kits from China.
Volkswagen’s sales in the Chinese market dropped by 30% year-on-year in the first nine months of the year, reaching 1.38 million units. The company is considering exporting models from its joint venture with FAW, which already sells vehicles in the Middle East, Central Asia, and Madagascar. These would be internal combustion engine vehicles, whose demand is declining sharply in China due to the rise of electric cars.
By assembling the kits in Turkey, Volkswagen will also be able to offer its models in the local market. The FAW-Volkswagen joint venture produces vehicles under the Volkswagen, Jetta, and Audi brands; however, it is not yet clear which models will be manufactured in Turkey. This move is part of Volkswagen’s plans to transform its Chinese plants into export hubs.
Volkswagen may bring some of its Chinese electric cars to Europe
From January to September, approximately 630,000 new cars were sold in the Turkish market. Cars with internal combustion engines still account for the majority of sales, which is why Volkswagen is interested in getting rid of some of its cars made in China. It is unlikely they will be sold in Europe, where electric car sales continue to accelerate due to rising fuel prices.
On the other hand, Volkswagen is not ruling out manufacturing some of its Chinese electric cars at its underutilized plants in Germany. Rumors suggest that one of the models that might end up in the Old Continent could be the ID. AURA T6, which would be renamed the ID. Touareg. This large SUV is expected to become the brand’s new flagship electric vehicle in its home market.
Meanwhile, Volkswagen is expanding its electric vehicle lineup in China with the ID. UNYX, ID. AURA, and ID. ERA series. Despite developing a dedicated electric platform for the region (CMP or China Main Platform) as well as an electronic architecture created in partnership with XPeng (CEA or China Electronic Architecture), it remains to be seen whether new models like the ID. ERA 5X can halt the decline in sales.
Source | Automotive News Europe