On April 11th, Volkswagen announced plans to invest 2.5 billion euros in China to further expand its production and innovation center located in Hefei, Anhui Province. Volkswagen also stated that it is preparing for the production of two Volkswagen brand models jointly developed with Xiaopeng Motors and is expected to enter production in 2026.

                                                                                     Photo credit Reuters

Ralf Brandstatter, a member of the Volkswagen Group's China Regional Management Committee, stated that as car manufacturers increase production of electric vehicles in Hefei, the Hefei factory will help to accelerate the speed of bringing technology to the market by about 30%.

This move demonstrates the rapid acceleration of cooperation between Volkswagen and Xiaopeng. After Volkswagen completed the acquisition of 4.99% of shares in Xiaopeng Motors in December last year, on February 29th of this year, Volkswagen Group announced the signing of a platform and software joint development technology cooperation agreement with Xiaopeng, aiming to jointly develop two Volkswagen brand mid size cars.

At the end of 2022, Volkswagen lost its brand title as the best-selling car in China. Volkswagen has announced a series of new models, including electric vehicles, in an effort to regain market share.