(Yicai) Dec. 5 -- The Chinese arm of Porsche will establish a new technical department to coordinate the German luxury carmaker’s research and development efforts in China.

The goal of the new department will be strengthening Porsche’s R&D capabilities in China and promoting the deep integration of technological innovation and localized strategy to further enhance the local adaptability of product and services, the Stuttgart-based carmaker announced yesterday. The department will also take charge of local sourcing and quality assurance.

Porsche has encountered great growth pressure in China in recent years. In 2023, it delivered 320,221 cars globally, up 3.3 percent from the previous years. However, its China deliveries plunged 15 percent to 79,283 units in the period, with the decline widening to 29 percent in the first three quarters of this year to 43,280 units.

The main reasons for Porsche’s sluggish performance in the Chinese market are the long-lasting price war, quick electrification, and intelligent transformation. The firm has only two pure electric vehicles in China, the Macan EV and Taycan, which are far behind local competitors in terms of intelligence.

Enhancing R&D capabilities in China has become a key strategy for German luxury carmakers to accelerate their intelligent transformation. In addition to Porsche, also Mercedes-Benz and BMW have established large R&D divisions in China focusing on smart driving and intelligent cockpit.

Editor: Futura Costaglione