Volkswagen will launch a new Electric-Brand in China
Volkswagen Faces Pressure in China. Sales of E-Cars Cannot Keep Up with Chinese Competition. Now, the Company Plans to Counterattack with a New Brand.
Europe's largest carmaker, Volkswagen, is launching a new electric brand for China. The first model under the new sub-brand ID. Unyx is expected to hit the market this summer, according to a spokesperson at the world premiere of the first model in Anhui, where it will be produced. Four more models are set to follow by 2026. Volkswagen aims to make a strong presence in China's booming electric mobility market, where local competitors like BYD currently lead.
"Electric models like the new ID. Unyx are the key to winning over young, lifestyle-oriented customer groups," said Volkswagen China Brand Chief Stefan Mecha. The sub-brand is expected to be positioned above the core brand VW and will also have its own dealership network with 40 sales outlets in 20 cities.
The first model of the new brand closely resembles the Cupra Tavascan, which is produced in the same factory and is set to come to Europe in the fall. However, the ID. Unyx features a completely redesigned interior. The Cupra Tavascan is the only model in the group that is built in China and exported to Europe. It is not offered in China itself.
BYD Takes Market Leadership
Volkswagen has struggled in China to meet the tastes of consumers with its electric vehicles. Chinese buyers are looking for more software and connectivity in the car, including social media capabilities. Additionally, a price war has developed in the rapidly growing electric car market with affordable Chinese manufacturers.
Volkswagen had long held the market leadership position in the country but had to give it up to local challenger BYD in 2023, which sold more electric vehicles than Volkswagen did in total. While Volkswagen remains competitive in the gasoline market, they play a supporting role in the electric car market. Of the 1.345 million vehicles delivered in China by all branded companies in the first half of the year, only about 90,000 had an electric powertrain.
To address this, Volkswagen plans to develop more in China to better understand the local market. Last year, Volkswagen entered into a cooperation with the Chinese carmaker Xpeng. Together with the partner, they will develop two electric mid-size cars for China, which are expected to be released in 2026. Whether they will then compete under the ID. Unyx sub-brand was left open by Volkswagen upon request.
- The push towards electromobility in China has led German automakers, particularly Volkswagen, to face intense competition, with local brands like BYD outperforming them in electric vehicle sales.
- Recognizing the need for a strategic response, Volkswagen is introducing a new electric brand, ID. Unyx, in China, which will debut with the first model hitting the market this summer.
- In an effort to capture a significant share of the Chinese electric mobility market, Volkswagen is investing in collaborative projects with local players, like Xpeng, to develop electric vehicles catering to the unique preferences of Chinese consumers.
