(Yicai) Nov. 28 -- SAIC Motor and Volkswagen Group have extended their China joint venture agreement until 2040, underlining their commitment to the Chinese market and their shared focus on electrification and intelligent vehicle technologies.

The deal’s renewal, inked in Shanghai on Nov. 26, reflects the mutual recognition of the 40 years of cooperation between SAIC and Volkswagen, the Wolfsburg-based firm announced yesterday. It also demonstrates shared confidence in China's auto industry and the wider economy, it added.

SAIC and Volkswagen joined hands in October 1984 when they set up SAIC Volkswagen, making it one of the first passenger car JVs in the country. They then renewed the agreement eight years ahead of schedule in April 2002.

“With this long-term contract extension, we underline the importance of this collaboration and the significance of the Chinese market for Volkswagen,” said Ralf Brandstätter, a member of the Volkswagen board for China. 

“We are accelerating the transformation of SAIC Volkswagen in line with our 'In China, for China' strategy on all levels, bringing a new generation of electrified vehicles onto the road by 2026, and thus making our partnership economically and technologically future-proof," he added.

With the 'In China, for China' strategy, Volkswagen has prioritized adapting its offering in the market, recognizing its importance as a global growth driver. Initiatives include partnerships with local tech firms and greater investment in electrified and smart vehicle development.

SAIC Volkswagen plans to launch 18 new models by 2030, of which 15 will be tailored to the Chinese market. It will continue to expand its product lineup, developing new all-electric models, range-extended variants, and plug-in hybrids. 

‘Defining Trends’

"Electrification and the transformation of the car into an intelligent vehicle are the defining trends in the automotive industry," noted SAIC Chairman Wang Xiaoqiu. "The focus for SAIC Volkswagen is on the development of new, intelligent electric vehicles in order to maintain an industry-leading position in the field of smart technologies.”

Based in Anting in Shanghai's Jiading district, SAIC Volkswagen has production bases in Nanjing, Yizheng, Urumqi, Ningbo, Changsha, and other cities. In 2015, it surpassed FAW-Volkswagen Automotive, the joint venture of FAW Group and Volkswagen, to become the top-selling passenger car company in China. 

Sales of SAIC Volkswagen fell 8 percent to 1.22 million units last year, extending a decline from a peak of 2.07 million units in 2018. However, the firm sold 512,100 in the six months ended June 30, up 1.8 percent from a year earlier.

Volkswagen also operates Volkswagen Anhui Automobile, its third China JV, which it set up with Jianghuai Automobile Group, better known as JAC Motors. In addition, it has allied with other Chinese firms, including Horizon Robotics and ThunderSoft, on self-driving, intelligent cockpits, and smart

Volkswagen plans to bring 40 new models to the Chinese market over the next three years, with half being electrified, it said, adding that it will offer more than 30 electric models in China by 2030.

Editor: Martin Kadiev