VW Exec: China’s New Auto Rules Benefit Established Carmakers

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Dec. 9 — New regulations and increased safety and technical standards introduced this year in China’s automotive industry favor well-established automakers that consistently meet higher benchmarks. This shift is seen as advantageous for companies committed to maintaining rigorous standards while innovating, according to the CEO of Volkswagen Group’s passenger vehicle division in China.

The recent policy changes raise the bar for all market players, potentially hastening the market’s consolidation around brands that can comply with strict requirements without compromising on innovation or user experience. In an interview, he highlighted that these regulations push the industry toward safer and more competitive vehicles.

This year, the Ministry of Industry and Information Technology rolled out new rules targeting the rapidly expanding electric vehicle market, covering areas such as battery safety, advanced driver assistance systems, and vehicle door handles. Additionally, the Ministry of Public Security issued draft safety standards last month, suggesting, among other things, that passenger cars shouldn’t be able to accelerate from 0 to 60 mph in under five seconds.

These regulations not only promote responsible innovation but also provide essential protections for consumers amid a fast-changing market. For instance, the proposed speed limits reflect concerns about unnecessary competitive escalation in vehicle performance—a stance that aligns with Volkswagen’s established priority on driving safety.

In response to stiff competition within China’s auto sector, Volkswagen is accelerating its strategic transformation. A key part of this effort involves collaboration with Chinese EV startup Xpeng Motors to develop the China-specific Electrical Architecture platform, which will serve as the electronic backbone for Volkswagen’s vehicles in China.

Starting next year, Volkswagen’s three joint ventures in the country will utilize shared electrification development platforms, including the CEA. The Group’s Hefei-based research and development center will oversee these efforts, ensuring coordination and integration, the CEO explained.

This approach aims to eliminate redundant investments and enable each joint venture to fine-tune products for their target markets, maximizing overall synergy. The joint ventures include FAW Volkswagen with FAW Group, SAIC Volkswagen with SAIC Motor, and Volkswagen Anhui with JAC Motors.