Volkswagen Anhui freezes new China EV model plans for 2027 and 2028

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VW Anhui delays China EV

Highlights

Volkswagen Anhui halts new model launches for 2027 and 2028 after ID. UNYX series underperforms expectations in China’s competitive EV market.
Volkswagen's China sales are projected to fall 20% in 2024, with January–September volumes down 30% year-on-year against a nearly 22% market decline.
Volkswagen Anhui operates far below its 350,000-vehicle capacity, targets 33,000 UNYX series builds for 2024, and aims for 128,000 UNYX sales in 2025.

Product pipeline slows at Anhui venture

As first reported by Reuters, two people with knowledge of the matter say Volkswagen's electric-vehicle joint venture in China has not scheduled any new models for 2027 or 2028 after demand for its ID. UNYX series falls short of expectations. One of the people says management at Volkswagen Anhui believes the current line-up is sufficient to establish the brand and support sales through 2028, although a crossover utility vehicle once considered for 2028 is also on hold.

The venture launched the UNYX marque in July 2024 to target young urban consumers, but its four-car range has not gained the traction Volkswagen had expected. To try to lift momentum, the company partnered with Xpeng on the ID. UNYX 08 SUV, yet sales since its April launch remain well below target, according to the people.

Volkswagen China says in a statement to Reuters that it is focused on "ramping up and optimising" the Anhui venture's dealer network to reach more customers and grow sustainably. The company declines to comment on questions about product strategy, but says Volkswagen Anhui is in the middle of a product offensive with four models on the market and a pipeline that continues beyond this year.

China pressure weighs on output and recovery plans

Volkswagen's broader China business is under pressure as the market weakens and domestic rivals intensify competition. Data from the China Passenger Car Association show Volkswagen's China sales are set to fall 20% this year from last year, while the German automaker sold more than 1.3 million vehicles in China in January to September, down 30% from a year earlier, compared with a market decline of almost 22%.

The Anhui venture, a nine-year-old operation with JAC that is 75% owned by Volkswagen, has yet to turn a profit and is set to break even by 2030, finance chief Arno Antlitz says at a quarterly earnings presentation. Its multibillion-dollar plant in eastern China's Anhui province is operating far below annual capacity of up to 350,000 vehicles, according to two people familiar with the matter.

An internal document dated late October reviewed by Reuters shows Volkswagen Anhui aims to build 33,000 UNYX series cars this year and plans what it calls an ambitious target of selling 128,000 next year. The document also says the factory builds Cupra Tavascan SUVs for export and plans about 33,000 of those this year, while consultancy ThinkerCar data show the venture sells 11,360 UNYX vehicles in January to September.

Volkswagen says on Wednesday it sells a record 28,000 new energy vehicles in China in October, more than four times the level a year earlier. The automaker also says it plans to introduce 30 NEV models in China through 2029, including from Volkswagen Anhui, and that ID. UNYX models will be refreshed to remain competitive.

Previously, we examined China growth outlook as economists weighed fresh policy support against weak domestic demand.

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