(Yicai Global) July 7 -- Volkswagen will accelerate its transformation to electric models by leveraging its position in the internal combustion engine market, according to the chief executive officer at the German carmaker’s China unit.

“We must make consistent use of our position in the ICE market,” Ralf Brandstätter, who is also chairman of VW China, said at the 2023 China Auto Forum yesterday. The firm is pushing ahead with hybridization, gradually moving its ICE fleet toward plug-in hybrid electric vehicles, he added.

“This year, Volkswagen has significantly increased its market share in the combustion engine business from 18 to 20 percent,” Brandstätter noted. “In the coming years, we will continue to strengthen our product base with new models.”

He said that in the sport utility vehicle segment, no other manufacturer has such a comprehensive range as VW, with 30 models, and the company will have launched 17 new combustion models by 2030. “We transform our strong ICE fleet into new energy vehicles and become an even stronger player in this segment.”

VW is investing smart in new technologies, such as the China Rush Hour Pilot and the Navigations System 2.0, which were "developed locally and very efficiently with our joint venture partners," Brandstätter pointed out.

The automaker is continually expanding and optimizing its existing electric model range, and new models will further strengthen its position in the fast-growing Chinese electric market, he noted.

The market share of NEVs is forecast to rise to more than 30 percent this year and over 50 percent by 2025, according to Brandstätter. By 2030, the total market will grow to between 28 million and 30 million vehicles, with 74 percent being NEVs and more than 55 percent being fully electric, and VW's brands will have at least 30 pure electric models on offer, he added.

But VW is facing an overheated market, Brandstätter pointed out. “An intense competitive environment, with more than 120 manufacturers and around 150 new models in 2023, has led to some drastic discounts in recent months.

“With intense competition and high battery prices, there is currently high economic pressure,” Brandstätter said. “Short-term sales successes are only possible with an extremely high capital investment. These funds are then unavailable for a long-term positive development of the market.

VW seeks to continue growing, even in such a challenging environment, but not at any price, Brandstätter stressed. Profitability has the highest priority, and the automaker will not take part in this unhealthy market development for short-term volume increases, he added.

Editor: Martin Kadiev