(Yicai) April 10 -- Volkswagen Anhui Automobile, a joint venture between Volkswagen Group and China's Anhui Jianghuai Automobile, has signed a deal with FAW-Volkswagen to use the mature dealer network of the German auto giant's JV with FAW Group to speed up sales of new electric vehicles.

Volkswagen Anhui will display and sell its latest EVs at some FAW-Volkswagen outlets, the two JVs announced last week. Its second-ever model, the ID. UNYX 08 sport utility vehicle, will be the first sold under the new tie-up.

Volkswagen Anhui, which is in the early stages of its business development, has a challenging sales task for the upcoming ID. UNYX 08 due to sluggish sales of its first model, the ID. UNYX 06, since it was released in July 2024.

The ID. UNYX 08 is the first auto developed by Volkswagen and Chinese EV startup Xpeng, specifically designed for the local market, with pre-orders open before an April 16 launch, Robert Cisek, chief executive officer for China at Volkswagen Passenger Cars, said online on April 7.

Volkswagen Anhui's business will improve significantly after the launch of three new models planned for this year, Stefan Timmermann, CEO of Volkswagen Anhui Digital Sales Service, told Yicai. Its four models target different customers, so their positioning does not overlap, eliminating internal competition, he added.

The ID. UNYX 08 is equipped with a Vision-Language-Action single end-to-end model, enabling enhanced Level 2 assisted driving. It is the first pure EV to adopt Volkswagen's new design language and is regarded as a strategic model for the firm's electric transition, making its success crucial for the EV business.

The ID. UNYX 08 starts at CNY239,900 (USD35,120), putting it in a highly competitive mainstream market with Li Auto's i6, Tesla's Model Y, and Aito M7, under the Aito EV brand co-developed by Seres Group and tech giant Huawei Technologies.

The entry of many new players in the EV sector has led to fierce competition to gain market share, which may negatively impact carmakers' financial situation, Timmermann noted. However, competition will also drive Volkswagen to enhance its innovation capabilities and operational efficiency, he stressed.

For example, the development cycle of Volkswagen's new models has shortened to three years from four years, with that of the ID. UNYX 08 being only two years, he pointed out.

Volkswagen raised its stake in Volkswagen Anhui, which was set up in 2017, to 75 percent in 2020. The UNYX brand targets young, fashionable urbanites who pursue smart experiences, with products featuring a golden logo to make it more distinguishable.

Volkswagen Anhui had only around 120 independent stores across China as of the end of last year, mainly in first- and second-tier cities as well as Anhui province, lacking significant coverage in third- and fourth-tier cities.

Editors: Tang Shihua, Martin Kadiev