(Yicai Global) Jan. 12 -- China’s auto market could expand by about 5 percent in 2023, according to the chief executive officer at the Chinese arm of German carmaker Volkswagen.

One-third of the cars sold in China this year will be new energy vehicles, despite the impending end of subsidies on NEVs, Ralf Brandstätter, who is also the chairman of Volkswagen China, said on Jan. 11.

Brandstätter’s prediction tallies with a forecast made earlier this week by the China Passenger Car Association. The industry group said 36 percent of all passenger cars sold in the country in 2023 will be NEVs, though demand for these types is expected to be weak this quarter.

NEVs, which include all-electric and hybrid vehicles, accounted for 27.6 percent of cars sold in China last year, up from 15 percent in 2021, the CPCA said on Jan. 10. According to data released by the China Association of Automobile Manufacturers yesterday, they made up nearly 26 percent.

VW delivered 3.2 million cars in China last year, down 3.6 percent from 2021, per figures the Wolfsburg-based automaker published yesterday. Those of NEVs jumped 37 percent to 206,500, almost 70 percent of which were in the ID. pure electric series, whose deliveries doubled.

To boost this year’s sales, Volkswagen China will launch the new ID.7 model, which has a cruising range of up to 700 kilometers, promote cooperation between its brands to optimize the allocation of resources, and enhance its software business.

VW announced last October that its unit Cariad would set up a joint venture with Horizon Robotics to accelerate the development of autonomous driving systems in the Chinese market. Cariad invested EUR2.4 billion (USD2.6 billion) for a 60 percent stake in the JV.

In the future, VW will allow Chinese suppliers to participate in the early development stage of smart electric vehicles to create customized solutions for Chinese customers, Brandstätter told Yicai Global.

Brandstätter, a member of Volkswagen’s board, was appointed CEO of Volkswagen China last June to tackle the intensifying market competition. The car giant also set up a board of directors in China with substantial decision-making powers.

Editors: Dou Shicong, Futura Costaglione