Volkswagen said it will spend €2.4 billion in China, its largest single investment in the country, to stay competitive in the age of smart electric vehicles. The planned investment will be in co-developing driving-assist functions for electric vehicles. The company said it is investing USD1 billion in Horizon Robotics, which will allow it to get involved earlier in the startup’s product development. Volkswagen will spend over €1.3 billion to build a joint venture with the company. “It clearly demonstrates the commitment to the future of our business in China” said Ralf Brandstaetter, Chairman and CEO of Volkswagen Group China. “We are here to stay. We are here to stay strong.” Beijing-based Horizon is one of the country’s leading providers of computing solutions for smart vehicles, specializing in software, algorithms and chip design. Its solutions for driving-assist and smart cabin functions have been used in a number of models by carmakers including local startup Li Auto.
The transaction with Horizon is expected to be completed in the first half of 2023, said Volkswagen. Its software arm Cariad will hold a 60% share in the joint venture that will develop driving-assist and autonomous driving solutions for its electric models in China. Volkswagen has long been one of the most popular international carmakers in the country, with around one-third of its global sales coming from China last year, but it is losing ground to local companies in the segment of smart electric vehicles.
Chinese marques offer the latest driving-assist functions and infotainment features that virtually make vehicles sleek digital devices on wheels, but such things are so far either absent or less advanced in many models from foreign brands, said analysts. Brandstaetter said China has been the world’s leader in intelligent and connected vehicles since 2015, “always faster than expected”. He attributed China’s leading role to factors like the country’s clear guidelines as well as the cooperation between the government, scientific institutions and companies. “To harness this trend of innovation, the best possible way to strengthen our competitive edge is to immerse ourselves in this eco-system,” said Brandstaetter. Chang Qing, CEO of Cariad China, said the joint venture will have hundreds of engineers from both companies at the start. Brandstaetter said test-driving an electric Volkswagen ID.4 SUV with technology from Cariad and Horizon was an amazing experience. He estimated that annual vehicle sales in China will grow to around 30 million units in 2030, and by then highly autonomous driving will become a decisive factor in competition, the China Daily reports.
