Volkswagen (VW) is leveraging Chinese technological know-how to compete with Chinese rivals abroad. The company began exporting gasoline-powered vehicles manufactured in China to the Middle East over a month ago. VW is now evaluating which other China-made products might be suitable for markets in Southeast Asia and Central Asia, according to Thomas Ulbrich, chief technology officer for VW China.

VW's factories in China can produce both internal combustion engine vehicles and electric vehicles. However, the company has no plans to export China-made vehicles to Europe. This decision is due to significant differences in electronic architecture and software technology required for smart vehicles in the European market.

Volkswagen ID.3 electric vehicle manufactured in China. *Photo: Volkswagen*

VW has invested billions of euros in its Hefei center as part of its "in China, for China" strategy. This initiative aims to regain market share from Chinese rivals in the domestic market. Simultaneously, VW faces increasing competition abroad as Chinese automakers expand to escape fierce price wars and domestic overcapacity.

The automaker has reached a significant milestone, now capable of fully developing new vehicle platforms and key technologies with all approval processes outside of Germany. Developing a new electric vehicle model in China can save up to 50% in costs compared to other locations, attributed to the scale of technology and suppliers available in the country.

VW will also soon sell vehicles developed on leading Chinese-developed electronic architecture outside of China. This architecture is a technical blueprint of components, including controllers and chips, that determine a vehicle's software capabilities. However, VW did not provide specific details on these export plans.

Currently in China, VW operates multiple manufacturing plants through joint ventures with various Chinese companies. The SAIC-VW joint venture and the FAW-VW joint venture each have 5 factories.

My Anh (Reuters)