FAW-Volkswagen Responds to Compensation Adjustment: System Alignment Due to Updated Foreign Investment Regulations, Plans to Scrap BD Bonus in 2027

Recently, FAW-Volkswagen officially responded to changes in its internal compensation system. FAW-Volkswagen stated that the compensation rule changes were prompted by updated national regulations on foreign investment management, which require enterprises to complete institutional alignment—a compliance requirement that foreign-invested enterprises in China must fulfill. Previously, FAW-Volkswagen's BD bonus was accrued and operated through categories such as employee incentive and welfare funds under the old rules. With the implementation of the newly revised Foreign Investment Law, the accrual rules for such funds have been abolished as of New Year's Day 2025. FAW-Volkswagen plans to gradually complete the restructuring of its compensation structure by the end of 2026 and officially eliminate the original BD bonus category in 2027. During the transition period, the company added a special incentive program at the end of 2026, distributing a "New Energy Breakthrough Award" in December for new energy vehicle models such as the ID. AURA T6 and Jetta M6, and will distribute a "Transformation Contribution Award" in January 2027 based on full-year performance. The new compensation rules use actual job contributions and output value as evaluation criteria. In terms of sales, the all-new ID. AURA T6 achieved monthly retail sales exceeding 12,000 units in October; the all-new Jetta M6 received over 10,000 orders within 19 hours of launch, and the production line is currently ramping up to ensure delivery.