The intensity of competition in China's automotive market is escalating, sifting through the industry like grains in a sieve. During the rapid development phase of the Chinese auto market, everyone was thriving; however, in the current period of transformation and elimination, there are those who lag behind, those who choose to lie low, and even those who exit the stage.

Yet, at this moment, companies that remain steadfast in their commitment to the Chinese market and take practical actions towards transformation are not only demonstrating remarkable courage but also showcasing strategic stability, indicating their strong capabilities.

On November 26, 2024, SAIC Motor Corporation and the Volkswagen Group signed an agreement in Shanghai to extend their joint venture contract, increasing the duration of their partnership at SAIC Volkswagen to 55 years, until 2040. This milestone agreement not only affirms the successes of their 40 years of collaboration but also reflects a strong confidence and optimistic outlook for future cooperation. The renewal marks the beginning of a new chapter in the joint venture, preparing to embrace new changes in the automotive industry.

Laying the Foundation for Joint Venture Cooperation

Looking back, SAIC Volkswagen, one of the earliest joint venture car manufacturers in China, has been tasked with pioneering a new era for the Chinese automotive industry since its inception in 1984. In October of that year, the Chinese and German parties officially signed the joint venture agreement at the Great Hall of the People in Beijing. This historic moment not only marked the beginning of joint venture cooperation in the Chinese automotive sector but also laid a solid foundation for the prosperity and development of the automotive market. Many of today's mainstream joint venture car manufacturers were not even established that year.

 October 10, 1984   The SAIC Volkswagen joint venture contract was signed at the Great Hall of the People in Beijing

From cultivating an industry chain from scratch to helping fill gaps in relevant laws for the automotive sector, it is no exaggeration to say that SAIC Volkswagen has accelerated the development of China's automotive industry.

In 2002, with the gradual opening of the Chinese automotive market and the new era of joining the WTO, SAIC Volkswagen was once again at the forefront, becoming the first automotive joint venture to renew its contract post-WTO accession. The partnership was extended to 2030, reflecting both parties' high recognition of their collaborative achievements and demonstrating a firm confidence in future prospects.

To renew the contract ahead of time in the current market environment signifies that both shareholders have a clear vision of SAIC Volkswagen's development strategy and future landscape, further solidifying SAIC Volkswagen's leading position in China's automotive industry and providing a more robust foundation for subsequent cooperation.

A New Phase of Joint Venture Cooperation

Now, standing at the new starting point of SAIC Volkswagen's 40th anniversary, the Chinese and German parties have once again renewed their joint venture contract, extending it until 2040. This decision is not simply a continuation but a new beginning, marking the entry of joint venture cooperation into a 2.0 phase.

In the face of new changes in the automotive industry, SAIC Volkswagen understands that only through continuous innovation and advancement can it maintain an undefeated standing in fierce market competition. Therefore, this renewal is not only an affirmation of past achievements but also a clear guiding direction for future cooperation. The two parties will further deepen their joint venture cooperation, continually merging optimal resources, and fully supporting SAIC Volkswagen’s transformation in product layout, industrial structure, energy conservation, and carbon reduction.

In terms of product layout, based on the five-party cooperation agreement signed in June this year between the Volkswagen Group, SAIC Group, Volkswagen China, Volkswagen Anhui, and SAIC Volkswagen, the latter will develop multiple new models for the Chinese market, including pure electric and plug-in hybrid vehicles.

By 2030, SAIC Volkswagen will launch 18 new models, 15 of which will be developed specifically for the Chinese market. This strategic deployment not only reflects SAIC Volkswagen's deep understanding of the demands of the Chinese market but also demonstrates its precise grasp of future trends in the automotive market.

In terms of industrial structure layout, SAIC Volkswagen actively responds to the national "dual carbon" goals, accelerating its efforts in energy conservation and carbon reduction. By optimizing production processes, improving energy efficiency, and promoting new energy vehicles, the company aims to reduce carbon emissions during production and contribute to environmental protection and sustainable development.

In energy conservation and carbon reduction, SAIC Volkswagen is leading the industry. As the front-runner in pure electric joint ventures, the ID. family has achieved cumulative sales surpassing 150,000 units, thanks to its exceptional quality and innovative intelligent configurations. This accomplishment evidences the market's recognition of SAIC Volkswagen's forward-looking positioning in the new energy vehicle market.

From Technology Introduction to Co-Creation in Technology, Building a New Industrial Ecosystem

In the context of China’s leadership in intelligent electric innovation technology, the collaboration between SAIC Volkswagen and the Volkswagen Group has also entered a new stage of co-creating technology. Both parties will join forces, collaboratively empowering the joint venture with technology, and embark on a new phase of automotive joint venture cooperation from "technology introduction" to "technology co-creation."

For a long time, SAIC Volkswagen has maintained a keen insight into and rapid absorption capacity for advanced international technologies. Through collaboration with the Volkswagen Group, SAIC Volkswagen has successfully introduced several internationally leading technologies and processes, providing strong support to enhance product quality and market competitiveness.

However, technology introduction is not the end. Standing at a new starting point of technology co-creation, SAIC Volkswagen and the Volkswagen Group will place greater emphasis on localized technological innovation and research and development capabilities.

In the fuel vehicle sector, SAIC Volkswagen focuses on intelligent fuel vehicles. The recently launched Tiguan L Pro and Passat Pro represent the first models of the Pro family, breaking sales records as the "smartest fuel vehicles" in their respective market segments, effectively dispelling the stereotype that "fuel vehicles are not intelligent." In early 2025, the all-new Teramont Pro, with fully upgraded product strength, will also hit the market, composing the trilogy of the Pro family.

Passat Pro

Tiguan L Pro

In the new energy sector, in addition to the aforementioned ID. family and various types of new energy vehicles, another core project of SAIC Volkswagen—the Audi SAIC project—has unveiled its first product, the AUDI E concept vehicle, just five months after its establishment. In 2025, Audi's first high-end intelligent connected electric vehicle will hit the market in mid-year.

AUDI E Concept Vehicle

Audi aims to build a new user ecosystem and innovative model through the AUDI brand, attracting younger and trendier users into the Audi family. SAIC Volkswagen will take on the responsibility for this ecological transformation.

In fact, since 2024, SAIC Volkswagen has conducted comprehensive planning around several new energy projects, including Audi SAIC. In March of this year, multiple automotive parts companies have reached cooperation intentions with SAIC Volkswagen, participating in the industry chain of the new project; the Anting ADP base associated with the new project is also undergoing upgrades; in September, SAIC Volkswagen signed a strategic cooperation agreement with Anting Town to kick off the land project, aiming to further leverage SAIC Volkswagen’s role as the "main player" in the vehicle manufacturing sector, continuously promoting key tasks like extending the industry chain and transitioning production bases, while accelerating the transformation of the enterprise itself and fostering the integrated development of local industry chains and the new industrial ecosystem.

In Conclusion

As one of the longest-standing joint venture car manufacturers in the Chinese market, SAIC Volkswagen has spent decades cultivating the automotive industry chain in China, and has invested further years bringing advanced technology into the country for processing and absorption. It can be said that SAIC Volkswagen is inextricably linked to the Chinese market, complementing each other at every turn. During this unprecedented time of transformation, the bond between Volkswagen and the Chinese market is deepening, as both sides bring forth their best and adopt a sincere attitude, aiming to continue crafting a more remarkable new story for China. As the latest trendy saying goes, "Embracing beauty together, hand in hand for the future."