Volkswagen plans to export Chinese-made cars to more overseas markets but rules out Europe

 Volkswagen plans to export cars developed and made in China to more overseas markets, an executive said on Tuesday, as the German automaker looks to leverage its growing know-how in Chinese technologies to compete with Chinese rivals abroad.

The company, which started exporting China-made petrol limousines to the Middle East about six weeks ago, is evaluating what other made-in-China offering could suit other markets, Thomas Ulbrich, chief technology officer of Volkswagen Group China, said.

Volkswagen’s Chinese factories can make both internal combustion engine vehicles and electric cars. Export destinations it is considering include Southeast and Central Asian countries.

“This is what we are doing in a collaborative decision-making process with our headquarters in Germany, because we have to pay attention that we have the right portfolio of cars in each market,” Ulbrich told reporters in the city of Hefei, home to Volkswagen’s Chinese production and innovation hub.

However, it has no plans to export the China-made cars to Europe due to a difference in electronic architecture and software technology for smart vehicles.

Volkswagen has invested billions of euros in the Hefei hub as part of its “in China for China” strategy that seeks to help the automaker regain market share from aggressive Chinese rivals by speeding up decision making and product development.

At the same time, it is facing growing competition abroad as Chinese automakers are increasingly looking to expand overseas to escape a brutal price war and overcapacity at home.

Volkswagen also said on Tuesday that it had reached a milestone because it was now able to fully develop new vehicle platforms and key technology with all approval processes outside Germany. Developing a new EV model in China can cost up to 50% less than elsewhere due to the scale of technologies and suppliers available in the country, Volkswagen said.

Volkswagen will also sell the cars developed on its flagship China-developed electronic architecture – an engineering layout of components including control units and chips deciding software capabilities of a vehicle – outside China “very soon”, Ulbrich said without giving specifics.