SAIC Volkswagen is preparing to compete fiercely with new forces

Author | Chai Xuchen

Editor | Zhou Zhiyu

In the just-concluded 2025, China’s automotive market experienced a fierce reshuffle. New forces, joint ventures, and BBA brands have gone through ups and downs, each leading the trend, and the industry’s reshuffle has become faster and more frequent.

Under the environment of accelerating independent brands’ offensive, for joint venture brands under siege, survival has become the most critical issue now. In the quagmire, SAIC Volkswagen responded to doubts with a performance report: in 2025, the terminal cumulative sales reached 1.06 million units, stabilizing the foundation and maintaining the “Million Club” qualification.

This joint venture giant has preliminarily completed its bottoming out, but the market will become even more frantic in the future, and it has also prepared a series of strategic moves.

Fu Qiang, Vice President of Sales and Marketing at SAIC Volkswagen, told Wall Street Journal that “In 2026, we will officially launch a strategic counterattack, centered around a new energy product series named ID. ERA. At the same time, SAIC Audi will focus its efforts. SAIC Volkswagen will launch 7 new energy models in 2026.”

“Starting from March, we will enter a period of intensive new product launches, roughly releasing a major product each quarter, with new products hitting the market every month.” Fu Qiang said, which also means SAIC Volkswagen is preparing to truly “fight head-to-head” with new forces in 2026.

Stabilizing the Foundation

Last year can be regarded as SAIC Volkswagen’s year of bottoming out.

Against the backdrop of an overall decline in the fuel vehicle market, SAIC Volkswagen’s fuel vehicle market share not only did not decrease but increased to 8.3%. The annual terminal sales reached 1.06 million units, which is not easy in the current decline of fuel vehicles.

Breaking down the sales structure, it is clear that what supports SAIC Volkswagen are still familiar products: Passat, Lavida, Tiguan. Despite the rise of domestically produced new energy models in 2025, along with price wars among joint venture brands, each still maintained a monthly sales level of around 20,000 units. On the other hand, SAIC Audi’s annual sales reached 47,000 units. Although this did not meet expectations, its 23% year-over-year growth outperformed the market.

Currently, Volkswagen remains the top foreign-funded automotive brand in China in terms of sales, and SAIC Group also hopes to reclaim the top spot among listed car companies in China this year. This requires a detailed analysis of SAIC Volkswagen’s strengths and weaknesses last year, focusing on key issues.

In fact, almost all joint venture brands in China face the dilemma of fuel vehicles dominating. This may be due to industry insensitivity or path dependence. How to balance the massive fuel vehicle business volume with the needs of new energy transformation is undoubtedly a challenge.

Last year, SAIC Volkswagen’s new energy vehicle sales still mainly relied on the ID. series. Besides the ID.3, which could steadily contribute over 3,000 units per month, the market performance of other models did not meet expectations, and their share in overall sales was relatively limited.

This was the core challenge SAIC Volkswagen faced last year: urgent transformation, but the main force still being fuel vehicles. However, recklessly dismantling the pillar of fuel vehicles to go all-in on electric cars is not realistic. Compared to deliberately pursuing a higher proportion of new energy, SAIC Volkswagen more urgently needs a clear product plan and future development direction.

Industry insiders believe that the most rational decision is to adopt a dual-track strategy—exploring the potential of fuel vehicles while increasing investment in new energy vehicles.

Last year, SAIC Volkswagen’s core strategy was “hybrid of fuel and electric, and intelligent of fuel and electric.” “We will continue to invest in fuel vehicles, leveraging our advantages to strengthen the first curve, while new energy must be the second, well-developed curve,” said Tao Hailong, General Manager of SAIC Volkswagen.

A year ago, from the Teramont Pro to Passat Pro, Tiguan L Pro, Lavida Pro, SAIC Volkswagen used intelligence to attract a group of existing fuel vehicle users interested in smart features. As market feedback shows, the Pro family saw explosive sales in 2025, with the Teramont Pro accounting for more than one-third of the series. This proves that users are abandoning not fuel vehicles, but unsmart fuel vehicles.

However, from the overall industry trend, the comprehensive shift to new energy in China is unstoppable. The ultimate goal of SAIC Volkswagen’s stabilization of the fuel vehicle base is to reserve energy for electric vehicles.

Stabilizing the core of fuel vehicles means stabilizing cash flow and brand influence, providing the most solid backing for SAIC Volkswagen to launch a full-scale offensive in the new energy field. The next phase’s key is to rely on core-competitiveness new energy models to recover market share.

Turning Defense into Offense

Entering 2026, SAIC Volkswagen’s stance has fundamentally changed. If previously it was “following,” now the core keyword for SAIC Volkswagen this year is only one: counterattack.

The arsenal for this counterattack has already been filled. In 2026, SAIC Volkswagen will launch 7 new energy products intensively, covering pure electric, hybrid, and extended-range technologies, thoroughly filling gaps.

The most anticipated new energy series, ID. ERA, is a flagship. Fu Qiang told Wall Street Journal, “The ERA series is entirely based on products developed from 0 to 1 for the Chinese market.”

The first release of ERA is a flagship, with the ID. ERA 9X being a range-extended vehicle, with a combined range possibly exceeding 1,000 kilometers, directly competing with popular models like Wenjie M9, Li Xiang L9, Lynk & Co 900, and Zeekr 9X.

This is not only a flagship SUV but also carries SAIC Volkswagen’s ambitions in the range-extended technology route. While companies like Li Xiang and Wenjie dominate with range-extended tech, SAIC Volkswagen is no longer stubbornly committed to pure electric, but pragmatically embracing market demand. The appearance of ID. ERA signifies that Volkswagen not only has German technology but also Chinese speed and definition.

For SAIC Volkswagen, the success or failure of the ID. ERA 9X is crucial to the success of the joint venture 2.0 model. Beyond the ID. ERA series, another important layout in SAIC Volkswagen’s new energy field comes from the AUDI brand.

As a product of deeper cooperation between SAIC and Audi, the AUDI brand is another trump card in 2026. The first model, AUDI E5 Sportback, will directly target the luxury pure electric sedan market, followed by the SUV model E7X, further expanding Audi’s tech-luxury lineup.

According to SAIC Volkswagen’s official plan, 2026 will see the launch of 7 new energy models, covering pure electric, hybrid, and extended-range powertrains. Fu Qiang said, “Starting from March 2026, SAIC Volkswagen will enter a period of intensive new product releases, roughly launching a major product each quarter, with new products hitting the market every month.”

However, the inertia of joint venture processes, the long cycle of brand redefinition, and fierce competition in the new energy market all mean this transformation will not happen overnight.

Tao Hailong frankly stated, “Joint ventures differ significantly from new forces, especially those represented by Huawei. But perhaps the outside world doesn’t understand that for joint ventures to break the traditional technology-driven model, shifting from the 1.0 era of technology import to the 2.0 era, the difficulty of transformation is enormous.”

In his view, the success of SAIC Volkswagen’s transformation cannot be solely judged by product launches; more importantly, whether the company’s systems, culture, and philosophy can adapt to the demands of the new automotive era. To this end, SAIC Volkswagen has carried out a series of organizational reforms, including introducing Huawei’s GTM organization into the marketing team and fully implementing IPD and IPMS processes.

For a traditional joint venture automaker, this is akin to a “blood transfusion.”

Accelerating Revolution

In the traditional joint venture model, R&D, manufacturing, and sales are often segmented in a “silo” structure. Wolfsburg defines the product, Chinese factories are responsible for production, and sales companies handle selling. This model is highly efficient in a seller’s market, but in the rapidly changing era of smart electric vehicles, it is too slow.

Tao Hailong believes that continuous development in the Chinese market is crucial. The next 3 to 5 years are extremely critical. How each product is positioned and what goals it aims to achieve must be managed through a combination of strategies.

Introducing the IPD process means SAIC Volkswagen will break down departmental barriers and realize “customer demand-oriented” R&D. Product definition is no longer behind closed doors but based on keen insights into the Chinese market. Each vehicle project team will become an independent “combat unit,” responsible for the final market results.

The introduction of the GTM process means front-loading marketing. Even while the product is still on the drawing board, how to sell, to whom, and what the core selling points are will already be determined. This will greatly shorten the cycle from SOP (mass production) to market launch, truly achieving “launch and delivery simultaneously, delivery and volume simultaneously.”

Tao Hailong and his predecessor Jia Jianxu are typical “action-oriented” leaders. They understand that to “fight head-to-head” with new forces, good products alone are not enough; decision-making speed and execution efficiency must be just as fast as the new forces. Learning from Huawei is to make this “big elephant” learn to dance, even to sprint.

The Chinese auto market in 2026 is destined to be an even more brutal elimination race.

For SAIC Volkswagen, this is not just a battle of sales volume but also a battle of models. It is trying to forge an unprecedented path: maintaining German quality and manufacturing heritage while achieving the agility and intelligence of new forces through comprehensive localization and organizational reform.

If the success of ID.3 was merely a test of SAIC Volkswagen’s foray into new energy waters, then the dual offensive of ID. ERA and the AUDI brand in 2026, combined with Huawei-style organizational restructuring, will be the full-scale firing of its main fleet.

Once, people doubted whether the elephant could turn around. Now, SAIC Volkswagen is attempting to complete its own iteration amid the industry reshuffle, aiming to stay at the table.

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