Volkswagen to Boost Self-Driving Tech in China Amid Market Pressure

German carmaker Volkswagen will be focusing more on self-driving technology in China in the coming months.

The company revealed on Wednesday that its automated driving branch CARIZON, based in China, would be strengthening its tie-up with Horizon Robotics, according to Yahoo Autos.

This is in an attempt for Volkswagen to develop its own sophisticated self-driving technologies more quickly, by using Horizon Robotics’ artificial intelligence model.

This includes Level 3 autonomous driving technologies, where drivers can take their eyes off the road, and Level 4 technology, which will be driverless robotaxis.

The company plans to introduce its first Level 3 autonomous driving vehicles to the Chinese market in 2027, as global competition in the self-driving technology market quickly heats up. These cars are expected to let drivers cede full control to the vehicle under specific circumstances, such as on motorways.

Deliveries for the Level 3 cars are due to start in the second half of next year.

Volkswagen will also start rolling out Level 2++ technology cars in the Chinese market this year, which will be for urban assisted driving. These vehicles can handle traffic lights, stop signs, roundabouts and automated turns.

According to the company’s CEO, Oliver Blume, this move would help strengthen Volkswagen’s competitiveness in China and usher in new opportunities in certain foreign markets.

The German auto company has also tied up with Xpeng, a Chinese electric vehicle manufacturer, to further solidify its position in the regional market and develop a new electronics platform for its Chinese models.

This will work closely with the AI-assisted self-driving technology and allow more consumers across Central and Southeast Asia, as well as the Middle East, to adopt the system as Volkswagen attempts to export more from China to these markets.

German carmarkers still under pressure from China

The last few years have been especially rough for German car companies, as falling sales, changing European regulations and the COVID-19 pandemic all hit at once.

Rising competition from Chinese auto manufacturers, especially EV makers, also added significantly to this turmoil.

EU-China trade and tariff tensions have also made this situation much worse. China has pulled back a lot of benefits for German car companies like Volkswagen, Mercedes, Audi, BMW, which had manufacturing operations in the country in recent years. These included cheaper land and lower tax rates, among other benefits.

Now, these European companies are also under increased pressure from China’s faster technology rollout for mass-market vehicles, with several Chinese cities already having fully driverless robotaxi services.

Many European consumers are also turning towards Chinese EV companies like BYD, for their relatively more affordable prices, sleek designs and modern features.

On the other hand, companies like Mercedes-Benz and BMW have suspended their Level 3 offerings in some flagship models after a short stint.

Volkswagen has also faced additional scrutiny lately due to considering a historic restructuring plan that could see up to 100,000 jobs slashed and close four plants across Germany.