Volkswagen will establish a joint venture with Horizon Robotics in China, its largest market, to develop autonomous and driver assistance systems. The company will combine many functions on a single chip to save cost and energy. Volkswagen AG will invest 2.4 billion euros ($2.3 billion) to establish an autonomous driving joint venture with China’s Horizon Robotics to strengthen its technology presence in the automaker’s largest market.
In a statement from the company, it was stated that the new venture will develop Chinese autonomous and driver assistance systems, and will combine multiple functions on a single chip to save costs and reduce energy consumption.
The technology will be developed for Volkswagen’s electric-only models in China, where consumers increasingly prefer domestic electric vehicles. “The joint venture will enable us to adapt our products and services to meet the needs of our Chinese customers more quickly and consistently,” said Ralf Brandstaetter, head of Volkswagen China. “Collaborating with Horizon will help us reposition ourselves in China.”
VW under pressure to improve sales in China
The automotive giant is under pressure to improve its sales in its largest market, China, which accounts for around 40 percent of deliveries. Last year, Volkswagen’s decline in sales outstripped the decline in overall sales as it struggled to keep up with local consumer tastes, which has been criticized for frozen screens and complex functions on many of its models.
The vehicle manufacturer’s software subsidiary Cariad will hold a 60 percent stake in the joint venture, which will be completed next year. Cariad aims to get things back on track after software development glitches delayed many models, including the Porsche Macan, one of the most important electric models.
The turmoil resulted in the resignation of Herbert Diess, CEO of Europe’s largest automaker, and the replacement of Oliver Blume. Horizon, whose investors include companies such as Intel, Hillhouse Capital and electric vehicle manufacturer BYD, has technology that can be installed in everything from cars to smart speakers and counts Volkswagen’s Audi brand among its partners, according to its website.