Shanghai (ZXZC)- On May 30, Volkswagen Group China ("VGC") signed an agreement with Hefei Economic and Technological Development Area, announcing the plan to set up a wholly-owned technology company in Hefei City, capital of China's Anhui Province.

The project, involving a total investment of roughly 1 billion euros, will integrate vehicle and component R&D functions, and will be built into Volkswagen Group's largest technology and innovation center in China.

Photo credit: Sina Weibo account of Ralf Brandstätter, Chairman and CEO of Volkswagen Group China

The new technology company, with the project name of 100%TechCo, is the largest of its kind within Volkswagen Group globally. Through 100%TechCo, Volkswagen Group aims to strengthen its R&D capabilities in China, enhance cooperation efficiency with joint-venture companies, optimize profitability, and reduce the development time of new products and technologies by around 30%.

Through the technology company, VGC will involve itself in early-stage R&D works, aiming to build greater technologies and strengthen its local R&D capability. Additionally, it will establish a centralized procurement system covering local suppliers in China while maintaining close connections with the European headquarters. This will ensure that Volkswagen Group can access the latest local technologies and applications, be closer to Chinese consumers and market trends, achieve faster development and shorter time to market, and enhance cost advantages and competitiveness.

100%TechCo is expected to officially commence operations in the first quarter of 2024, bringing together over 2,000 employees in the procurement and research and development fields, including highly skilled local talents.