German carmaker VW expects more competition in Chinese market #NewsGerman

German carmaker Volkswagen expects competition to intensify with the increasing presence of large tech companies in the Chinese car market.

“That doesn’t make life any easier for us,” Volkswagen board member for China Ralf Brandstätter said in Shanghai on Tuesday.

However, VW believes that its state-of-the-art technology puts it in a good position to compete and capture its share of the market.

“In my view, the playoff season is now beginning,” said Brandstätter, referring to the knockout stages common in sport. Some market players could catch up, but not all would survive, he added.

The Volkswagen Group, which also includes the Audi and Porsche brands, has announced a major product offensive for the Auto Shanghai motor show starting on Wednesday.

On the eve of the exhibition, the group unveiled five new cars. VW is presenting three vehicles in Shanghai as “show cars,” that is vehicles close to series production.

These include an SUV with a range extender, meaning an electric car with a combustion engine that charges the battery, thus guaranteeing a longer range.

VW also presented a fully electric car and a car in the highly competitive compact class, which is also intended to compete with Chinese rivals on price.

According to Brandstätter, the vehicle would cost the equivalent of around €17,000 (about $19,600) in China.

Prices in China are a problem, VW brand boss Stefan Mecha said.

The competition’s vehicles have all the technology, but not at a realistic price, he said. To give a realistic picture, the cars would actually have to cost twice as much, according to Mecha.

Volkswagen is focusing on high-tech features in its vehicles and is presenting an automated driving system (ADAS) developed in-house in Shanghai. The driving system is designed to achieve a driving capability of up to level 2++.

This means that the car does not drive completely autonomously, but the technology offers functions such as lane departure warning and speed control, which are intended to relieve the driver when driving on the motorway.

Fierce competition in China and high restructuring costs within the company had a noticeable impact on the entire Volkswagen Group last year, earning €12.4 billion, almost 31 % less than a year earlier.

China – which formerly drove profits at VW – contributed significantly less to the result.