File Photo: VCG

German carmaker Volkswagen Group said on Wednesday that it was strengthening its position in the Chinese car market with cooperations between the VW brand and Chinese electric carmaker XPENG and between Audi and SAIC, one of China's largest carmakers.

The move further underscores German companies' interests in expanding their operations in the Chinese market, even as some German politicians are pushing for so-called "de-risking" economic ties with China. Chinese officials and analysts have rejected such a push could impede normal, win-win cooperation.

With the deal between VW and XPENG, the Volkswagen Group is to invest approximately $700 million in the Chinese manufacturer of intelligent electric cars. The initial stage of the cooperation shall provide for the joint development of two VW brand electric models for the mid-size segment in the Chinese market, according to a press release.

Meanwhile, the recently founded Volkswagen Group China Technology Company (VCTC) is the development partner for XPENG. The new development, innovation and procurement center is the Group's largest development location outside Wolfsburg, Germany, where the company is headquartered.

In a separate deal, Audi has signed a strategic memorandum with its Chinese joint venture partner SAIC to further expand existing cooperation. Joint development activities are to extend the portfolio of fully connected electric vehicles on offer in the premium segment swiftly and efficiently, according to the press release.

"Both agreements also envisage a planned, future joint development of new local platforms for the next generation of intelligent, fully connected vehicles (ICV). The partnerships aim to swiftly expand the Group's product range with further models from China for China in particularly promising customer and market segments," the press release said.

Volkswagen's announcement on Wednesday comes just about two weeks after the German government issued its first so-called "China Strategy" in mid-July, in which it said "de-risking is urgently needed," though it was not pursuing "a decoupling of our economies."

The document drew criticism from Chinese officials and experts. The Chinese Embassy in Germany urged Germany to view China's development in a rational, comprehensive and objective manner. The embassy said viewing China and making China policy based on ideological bias will only lead to misunderstanding and misjudgment, and impair cooperation and mutual trust.

Global Times