A key player in China's booming electric vehicle (EV) industry, Hefei, capital city of the eastern Anhui Province, has witnessed Volkswagen's rapid growth in the country, with the German carmaker leveraging the perfect confluence of timing, location and people in the world's largest auto market, according to Dr. Erwin Gabardi, CEO of Volkswagen (Anhui) Automotive Company Limited.
In an exclusive interview with China Global Television Network (CGTN), Gabardi recounted the remarkable progress of Volkswagen in China. He highlighted the swift construction of the MEB plant in Anhui, completed in just 18 months - a feat he dubbed "Anhui Speed."
"In total, more or less, we have now more than 300 production suppliers and 1,200 general suppliers. Meanwhile, we also attracted a lot of suppliers here to Hefei. So, we have more or less the whole value chain for EV production and also, we attracted core partners into here. For example, cooperation with ThunderSoft, which will deal with the HMI and Infotainment systems so here a project house will be launched here. And also the recent cooperation we announced last year with XPeng, we will also do the development of the two cars we do together with XPeng, based on XPeng's platform we will do also here in Hefei, from an R and D perspective, but also from a production perspective. So, back to the question, the beauty is that you have everything very close together, all at the same place, and that gives you speed because you have short ways, you have face-to-face contact, you have teams working together closely, and that's definitely an advantage," he said.
Gabardi credited Volkswagen's success in China to evolving cooperation and symbiotic relationships with partners. He noted that this year marks the 40th anniversary of Volkswagen in China, a testament to the enduring collaboration between Germany and China.
"I think in China especially, cooperation was always part of the successful story of Volkswagen in China. Because you maybe know that this year's the 40 years anniversary of Volkswagen in China. So, it was always a cooperation between Germany and China driving the success of Volkswagen in the market. I think this fundamental principle has not changed, but the type of cooperation has changed. Nowadays, the more we go into e-mobility and connected cars, I would say it's more symbiotic. And for us, the relevant partners changed a little bit. It's not the partners building a factory. It's now more of the partners about software, about autonomous driving, like Horizon (Robotics); about connectivity, and infotainment system, like ThunderSoft," he said.
Gabardi said Volkswagen's development in Hefei embodies a proverbial Chinese saying that spells out the key factors leading to success: right time, right place, and right person doing the right thing.
"I think in China, there is a very interesting saying which is called 'Tian Shi Di li Ren He' - be at the right time, at the right place, with the right people. It's partially, I would say, a coincidence, and partially it's really strong commitment from the people. Because, basically, and I was here also in 2018, that there will be a transformation towards electric cars. But this transformation is coming much faster compared to what we expected it to be now. And we expect, at the moment, that by 2025, we'll see already 50 percent of cars electrified in China, which is given the market size incredibly big. So, we are definitely with our products which focus purely on electric, we are definitely here at the right place, at the right time. Also, here the Hefei government is part of this partnership, meaning basically that they are for us like entrepreneurs - the same spirit. We want to grow our company, they want to grow their city, and that is somehow to turn their city from a formally tier three, tier-two into a tier-one city going forward. And then, also when it comes to people, we have a very good talent pool because here are three of the most important universities in China, like the USTC - the University of Science and Technology (of China) - and also there we have established a good cooperation. Therefore, this 'Tian Shi Di Li Ren He' - be at the right place, at the right time, and with the right people - is definitely true for Hefei," he said.
Volkswagen was one of the first major global automotive companies to establish a joint venture in China. In 1984, SAIC Volkswagen Corporation Ltd., Volkswagen Group's first joint venture in China, was established in Shanghai, followed by FAW-Volkswagen Corporation Ltd. in 1991. In 2017, the group launched Volkswagen (Anhui) Automotive Company Limited, with a mission to manufacture EVs in China for the Chinese market.
Last year saw the establishment of Volkswagen China Technology Company (VCTC), the group's largest research and development (R and D) center outside Germany.
Volkswagen had signed an agreement with Chinese electric vehicle startup XPeng on strategic technical collaboration to jointly develop two intelligent connected vehicle models for the Chinese market, Volkswagen Group China said early this year.
Volkswagen owes rapid growth in Hefei to perfect confluence of timing, location and people: CEO
