Volkswagen is one of the first international car manufacturing companies to have started their business in China. Its success story in the world's largest car market serves as a strong testament to China's reform and opening-up policy. Last year, Volkswagen benefited from the robust recovery of the Chinese economy and delivered more than 3.8 million vehicles to the customers, making China the biggest contributor to Volkswagen's global sales. This year, it will launch more new energy vehicles, foreseeing China to lead global innovation and cleaner, greener energy.

CGTN's Michael Wong speaks with Stephan Woellenstein, CEO of Volkswagen Group China, on how the carmaker is going to ride the trend of going green and electric and what trends are emerging in China's car market.

CGTN: It's been a tough year for the global auto industry because of disruptions from the pandemic. What's the recovery looking like here in China? Has the momentum come along?

Woellenstein: First of all, we have been successfully rooted in China for so many years. Like many other companies, we can be grateful that we have benefited a bit from the strong recovery in China, you probably noticed it in the automotive sector.

If you take the recovery of the second half of 2020, which was already a strong one, we see this also projecting into 2021. This would be a double phenomenon. Because it would mean that China would recover from our industry, in particular, the COVID-19 dip, so it would become better than 2019, but also, it would mean that the shortfall that we saw on the Chinese economy due to the U.S.-China trade frictions would fully recover. And if our projection becomes true, we would see a growth in the automotive market and also in the general economy, which is going beyond the levels when we saw the deep starting in 2018. Pretty promising. 

CGTN: For the Two Sessions this year, what kind of policy signals are you looking out for?

Woellenstein: As always, we expect strong signals about the government supporting economic development. A lot of what we expected has already come true, confirming the further opening up of China. We very much welcomed the final sprint between China and the European Union (EU) in December. 

We have concluded a deal with east China's Anhui Province, with Volkswagen Anhui as it is named now, formally JAC Volkswagen. Audi has just announced that we do a similar setup with our partner FAW around the PPE company, two electric ventures. So it shows me a very clear political willingness to further open up in the new fields.

CGTN: What is the investment plan for Volkswagen in China's new energy vehicles (NEVs) market, and how to lead in terms of green in China?

Woellenstein: We have committed to this in the Boao agreement that by 2035 we aim for 50 percent and more on the NEVs. In order to cater to this, we invest about 15 billion euro ($17.83 billion) into NEVs. We bring a full lot of cars on the Volkswagen brands. You probably have noticed that at the end of the year, we have introduced our first car on the magic MEB platform, the so-called ID, a family with the ID.4 SUV.  In Shanghai we will show more ID's new cars to come, so we are really building our portfolio. Audi is starting to really massively kick in with electric models, so we are really determined to make NEVs the new normal, also in China. 

CGTN: There is a target in China that by 2025 20 percent of all new vehicles sold should be NEVs and all public transportation vehicles should be electrified by 2035. Do you think China can achieve that goal? 

Woellenstein: We are pretty clear that this is going to happen, otherwise, it would be crazy for us to invest that much money. Also, we have invested in production facilities with our two joint venture partners, being able to cater to about 600,000 electric vehicles for a year...So in two or three years, we will have a NEV capacity of more than 1 million cars. So we would have a capacity that would be in 2020 enough to do 100 percent of the NEV market in China.