After years of rapid expansion and fierce internal rivalry, China’s automotive industry has reached a critical turning point.

Regulators have issued clearer compliance guidelines for marketing in the intelligent connected vehicle sector. Consumers are shifting from chasing novel concepts to focusing on fundamentals: safety, reliability, and value. The struggle to grow revenue without profit shows that price wars and marketing gimmicks have hit a ceiling.

Amidst these changes, competition in the domestic market is shifting from expanding market share to creating value.

SAIC Volkswagen delivered 1.06 million vehicles in 2025. This marked a pivotal year for its strategic transformation. As a cornerstone of China’s auto industry modernization, the company ended on a high note.

Maintaining its place in the "million-unit club" required more than scale. It marked the launch of its JV 2.0 strategy. This reflects a leading joint venture adapting to new rules through strategy, products, and restructuring. It signals that systemic capability and long-termism are key to sustainable development.

SAIC Volkswagen’s Dual-Track Strategy

Many automakers face a strategic dilemma: sacrifice electrification or internal combustion engines (ICE). SAIC Volkswagen’s strategy of "advancing ICE and EV in parallel, and applying intelligence to both" shows deeper global thinking.

This dual-track layout involves differentiating value and technology. It aims to cover diverse user needs and equalize experiences across generations.

SAIC Volkswagen’s results refute the argument that automakers should abandon fuel vehicles. The company invested heavily in core technologies. The fifth-generation EA888 engine ensures leadership in powertrain technology.

Models like the Pro family feature advanced driver-assistance systems and OTA updates. They challenge the misconception that fuel cars are not smart. The SAIC Audi A5L Sportback integrates Huawei’s Qiankun system. This overcomes the barrier of adding smart driving tech to fuel vehicles.

A5L Sportback, Image source: SAIC Audi

These moves create a "golden value triangle" of quality, engineering, and intelligence. They prove that fuel vehicles can offer modern tech experiences.

Prioritizing ICE does not mean defending old territory. In new energy, SAIC Volkswagen pursues a differentiated path. It uses multi-brand synergy and high-low-end development to avoid spec wars.

The Audi brand explores a new luxury EV paradigm with Chinese wisdom. The "AUDI E5 Sportback" is a key move. It sets benchmarks for design, intelligence, and performance. Market results validate this route. The "E7X" SUV completes the family strategy.

E5 Sportback, Image source: SAIC Audi

The Volkswagen brand targets a broader market with the ID.ERA series. It offers systematic value backed by a century of heritage.

The ID.ERA 9X, the first 9-series model, garnered attention for its range extender and rigorous standards. SAIC Volkswagen brings a "regular army" quality control system to this segment. It offers long-term reliability rather than just specifications.

ID.ERA 9X, Image source: SAIC Volkswagen

This dual-track layout is a steady transformation path. It balances scale stability with profitability. It launches an offensive in the new energy battlefield.

From Strategic Layout to Delivering Results

Any grand strategy requires a strong organizational system and operational ecosystem.

Official data shows significant "soft power" reforms in 2025. The focus shifted from scale-driven operations to an agile, user-driven ecosystem.

SAIC Volkswagen reformed internal processes around IPD and IPMS. It established a GTM organization. The "one product, one team" model boosted efficiency. This integrates "In China, For China" into the company’s operational logic.

Based on recent strategy and product foundations, SAIC Volkswagen defined 2026 as the year for "comprehensive delivery of strategic results."

The most intensive product offensive in years is underway.

The ID.ERA 9X is ready to launch. The E7X has a confirmed timeline. From the second quarter, SAIC Volkswagen plans to unveil a new model every month.

Brand values are being refreshed. Volkswagen focuses on "Progressive, Reliable, Caring." Audi aims for "Youthful, Tech, Luxury" with its new sequence.

Image source: SAIC Audi

Future obstacles remain. Can new products win attention in a startup-defined market? Can the intelligent experience prove reliable? Can the dealer network improve efficiency? The market will test these questions.

In 2025, SAIC Volkswagen showed systemic thinking at a historical turning point.

It balanced strategy with parallel ICE and EV advancement. It improved experience through intelligence. It supported change with organizational restructuring. This converts 40 years of R&D and quality control into core competitiveness.

As 2026 begins, the market will test this transformation logic. Can systemic resilience win user trust in the smart EV era?

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