Interview: China as "pacemaker" in technology means more opportunity for VW, says CEO

MUNICH, Germany, Sept. 7 (Xinhua) -- As a pacemaker in the technology sector, China shows what will happen in the next 10 years around the world, which represents for the Volkswagen Group "a big opportunity, especially with our strong connection with our Chinese partners," Oliver Blume, the group's chief executive officer, has said.

Cooperation with China means more opportunity than threats, Blume told Chinese reporters during the 2023 International Motor Show, one of the world's largest mobility trade fairs, which opened in the southern German city of Munich on Tuesday, with German and Chinese exhibitors in the limelight.

Such cooperation helps Volkswagen's business all around the world and makes the company even stronger. "Over the past months, we have developed a China strategy for the Volkswagen Group, which outlines our commitment to develop in China, for China and for the Chinese customers."

China will play a major role for Volkswagen in the future, he said. "We are heavily committed to our investments there. Our commitment is underlined by our own activities, and we are also building close partnerships.

"We will combine our experience and our knowledge with new technologies being developed in China. This combination will make us so special. We have our heritage, and we will integrate these new technologies into our well-known products," the Volkswagen CEO said.

According to Blume, the economic situation, the quality of life of people and families in China have been improving at a fast rate in the past decades and there remains substantial potential for further development in the future.

"The big potential is in the second, third or fourth-tier cities in China," he said, emphasizing his "very positive view that there will be a big punch for consumption, as China is developing."

China's second, third, and fourth-tier cities are typically characterized by their relatively smaller populations and lower levels of economic development compared to megacities like Beijing, Shanghai, and Guangzhou. However, these cities have witnessed substantial growth and urbanization in recent years, with ample room for future growth.

In addition, China's fast development in electromobility, digitalization, connectivity and autonomous driving gives it a new competitive edge, according to Blume. "That was for us the motivation," he added.

China has shown the world how speed works, and that is "what we can learn from China -- to be quicker, to be more pragmatic, to find solutions. And that's very positive," he said. "In the end, everything is about speed."

Blume said that Volkswagen has changed its strategy to focus more on value over volume in China. "We are focusing more on the profitability of our cars, exciting our customers," he said.

Mentioning the partnership with Chinese electric vehicle manufacturer Xpeng, Blume said "it's a good mix, and we can benefit from each other."

Blume considered it a "good opportunity" to exchange engineers between Volkswagen and Xpeng.

"For me, it's always important to have a win-win situation when you make partnerships, and that's what we used to do with our joint venture partners, FAW (First Automobile Works) and SAIC (Shanghai Automotive Industry Corporation), in the past. In the future, with Xpeng or in our joint venture with Horizon Robotics, there will also be positivity in these partnerships," he said.