Volkswagen has announced a $2.6 billion innovation-focused investment in China

Volkswagen, a German automaker, said in a statement on Thursday that it will be investing over 2,600 million dollars in China to enhance the capabilities of its Hefei innovation center, which is situated in the province of Anhui.

Together with its Chinese partner XPENG, the business is developing two additional models in addition to this one, with the goal of launching the first one—a mid-segment SUV—into production in 2026.

Now celebrating its 40th year in the Chinese market, the carmaker employs 90,000 people, has 39 production facilities, and has almost 50 million consumers who drive vehicles bearing one of the group’s trademarks.

As a matter of fact, China emerged as Volkswagen’s second-largest market in the first quarter of 2024, with sales of 693,600 units—a 7.6% increase over the same time in the previous fiscal year.

In addition to producing two electric vehicles for the Chinese market, its joint venture with XPENG also includes a program to source platforms and parts that are utilized by both businesses. The initiative was launched in February.