(Yicai) Oct. 25 -- Luxury German car brand Porsche is hoping to meet the demands of Chinese market by expanding its local research and development team, 36Kr reported today, citing multiple sources.

One of the key goals for the brand, which is owned by Volkswagen Group, is to enhance its smart cockpits and advanced driver assistance systems.

“The R&D team is one of the strategic priorities for Porsche China,” the report quoted a company source as saying. “This team will be responsible for the adaptation and development of intelligent applications in China in the future.”

The China R&D team will move from Shanghai’s Pudong area to Jiading district, where many other auto R&D centers are located. Additionally, Porsche will establish its own research laboratory there, the report quoted another insider as saying.

The Porsche China R&D team was set up in 2022. It was previously only responsible for testing and preparation work for the launch of imported models in China, but the team has grown to nearly 50 members in the last two years. This hiring round marks the second major expansion of the R&D team in the country since its formation.

One of the pressures faced by Porsche is a continuous decline in sales in the Chinese market. This is partly because the company lags behind Chinese independent brands in terms of smart technology.

In 2022, Porsche's sales in China approached 100,000, making it the company’s largest market for the eighth consecutive year. But annual sales dropped to 79,000 last year, and it has sold just 43,000 cars in the first three quarters of this year amid the rapid rise of Chinese auto brands.

Porsche's transition to fully electric vehicles has not been smooth either. Some Porsche dealers have reported that the market’s feedback on the all-electric Macan has not been favorable.

Editor: Tom Litting