Volkswagen will spend €1 billion on setting up a new innovation centre in China, as the German company seeks to better appeal to the tastes of local consumers in the world’s largest car market where its market share is in decline, reports the Financial Times. The German carmaker said on Tuesday it would start a company, 100%TechCo, that would employ about 2,000 people and play a “major role” in the development of a future Volkswagen model expected to be launched next year.
VW has long dominated sales of combustion engine cars in China but has lagged behind domestic rivals, most notably BYD, in the rapidly growing category of electric vehicles. Its market share in China was 16% last year, down from 18.5% in 2018.
The declining Chinese position for VW, which has faced criticism for becoming too closely entwined with Asia’s largest economy, is among the biggest problems facing relatively new chief executive Oliver Blume.
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