On Wednesday, the Volkswagen Group outlined its strategy for conquering China, currently its second-largest market behind Germany.

The automotive giant explains that by 2026, it intends to be in a position to compete with local manufacturers of entry-level "compact" vehicles, a segment that will eventually account for more than half of the market.

To achieve this, VW explains that it intends to rely on a local platform called 'CMP', which should enable it to reduce its costs in electrics and electronics by 40%, thanks in particular to a collaboration with Xpeng in batteries.

At the same time, the use of a locally-developed digital architecture, known as 'CEA', should enable the company to reduce its digital costs and accelerate product development.

Ultimately, Volkswagen aims to increase its operating income in China to over two billion euros by 2027, and to some three billion by the end of the decade.

The automaker expects to sell around four million vehicles in China by 2030, giving it a market share of around 15%.

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