Volkswagen is one of the top-selling car companies in China, but it is lagging behind local carmakers in the country's NEV market.
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Volkswagen has been in talks to use Huawei software in its cars in China, hoping to boost its efforts to gain a bigger share of the country's electric vehicle (EV) market, a Financial Times report said today.
Three people familiar with the situation said Volkswagen has spoken with Huawei about using the latter's technology in its cars, while another person said the German carmaker has held similar talks with other Chinese groups, according to the report.
Volkswagen is one of the top-selling car companies in China, but it lags behind local carmakers in the country's new energy vehicle (NEV) market.
In the January-April period, Volkswagen's joint venture in China, FAW-Volkswagen, sold 509,774 units at retail, up 1.4 percent from a year earlier, and came in second with an 8.6 percent share, according to the China Passenger Car Association (CPCA).
BYD sold 702,608 vehicles during the period, up 79.2 percent year-on-year, and ranked first with an 11.9 percent share.
Volkswagen's other joint venture in China, SAIC Volkswagen, sold 338,673 vehicles at retail from January to April, down 2.7 percent year-on-year, and ranked fifth with a 5.7 percent share.
In the NEV segment, BYD ranked first with a 38.1 percent share from January to April, while Tesla was second with a 9.6 percent share.
The NEV sales of Volkswagen's two joint ventures were not in the top 10 of the January-April list published by the CPCA. The No. 10 on the list is Neta, with 33,529 units sold from January to April and a 1.8 percent share.
In July 2020, Volkswagen founded software company Cariad under former CEO Herbert Diess, but earlier this month it removed almost all of Cariad's top executives from their positions.
The Financial Times report cited a person familiar with the talks between Volkswagen and the Chinese companies as saying the discussions reflected how big the problem is for a group like VW, whose unique selling proposition is their scale and platforms.
Another person said Volkswagen is also aware that a Chinese software partner could appeal to Chinese customers who favor local suppliers and are obsessed with stories of technological self-reliance.
Although its software is seen as lagging behind some local players in China, Volkswagen is one of the most aggressive of foreign car companies seeking change.
Last October 13, Horizon Robotics, one of the leading providers of computing solutions for smart vehicles in China, announced that Cariad would form a joint venture with it to accelerate its efforts to develop smart driving technology locally.
Volkswagen plans to invest about 2.4 billion euros for a 60 percent stake in the joint venture, which is expected to close in the first half of 2023, according to a statement from Horizon Robotics.
VW to invest €2.4 billion to form JV with Chinese firm Horizon Robotics
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