VW to introduce big array of green models

Under its "think blue" initiatives, Volkswagen is thinking large.

The German company is planning an assault on China's new energy car market, with 20 products due to be released by 2016. The strategy is to offer a broader range of green cars than competitors do, from small sedans to large sports utility vehicles, both plug-in hybrid and all-electric models.

A trio of Volkswagens, the Golf GTE hybrid, E Golf, and Electric Up, were unveiled last month. The Porsche Panamera S E-Hybrid is already in showrooms, and the Audi A3 e-tron is set for launch next year.

Such a huge variety of choices is designed to address the diverse demands of the world's biggest auto market by a company known for its multi-tasking capabilities.

Its MQB strategy, which enables shared modular construction, allows for flexible production of electric cars with minor adjustments to the existing production lines. The toolkit used to electrify the MQB platform-based Golf, for example, can be used on any other MQB cars as well.

Pursuing economies of scale is considered integral in steering electric cars toward commercial viability in a market where consumers have been giving green cars the cold shoulder, largely because they are too expensive.

"The cost of new energy vehicle components is currently quite high, but they will come down with volume," said Jochem Heizmann, president and CEO of Volkswagen Group China. "At the beginning of local production, some of the components will be imported. Looking at the prospect of hundreds of thousands of such cars being sold in China, I believe most of those components will have to be localized."

While exploring various substitutes to internal combustion-engine vehicles, the company is sharpening its focus on what it believes is the most practical green solution in the short term — the plug-in hybrid. That format addresses charging issues more easily than all-electric cars. The Golf GTE hybrid, for instance, can be fully charged in six hours from a normal household socket, while purely electric cars usually need special charging facilities.

In 2016, Volkswagen will start local electric-vehicle production by adding the plug-in hybrid as a variant choice to its new Audi A6 and another Volkswagen car, perhaps the Lamando or new Passat.

Though currently plug-in hybrids are not included in every local green car subsidy programs in China like all-electric ones, Volkswagen doesn't seem too worried about it. The company figures that any locally manufactured new energy cars, regardless of type, will always have a greater shot at preferential policies.

Guidelines to reduce CO2 emissions in China by requiring fuel consumption of 5l/100 km by 2020 are even more challenging than the 95g/km standard set by the European Union. People in China prefer more spacious cars that are naturally heavier and less fuel-efficient. Volkswagen's answer to this quandary is a holistic approach that explores all possible technical solutions, including alternative drive systems as well as sophisticated vehicles and powertrain measures.

Earlier this month at its new plant in Tianjing, Volkswagen put into production its latest gearbox for China — the 7-speed dual-wet-clutch DQ380. Volkswagen car models upgraded with this gearbox, together with the third-generation EA888 engine, can achieve fuel consumption savings of 0.5l/100km and CO2 emissions reductions of 12g/km. Built with an investment of 2.2 billion yuan (US$360 million), the plant has an initial manufacturing capacity of 450,000 units a year, which can be ramped up to 1.2 million in 2016.