Volkswagen extends joint venture with FAW to 2041

Article by Christian A., on October 13, 2014

As it pushes to grab a larger share of the auto market in China, Volkswagen agreed to extend its joint venture with FAW Group Corp. by 25 years. Under the new agreement, Volkswagen and FAW will "significantly expand" existing r&d activities in China while into new business areas particularly on alternative drive technologies, VW said in a statement that the current agreement with FAW will expire in 2016, but has been extended to 2041.

The German carmaker announced in July it will make a EUR2 billion investment with FAW to build two more assembly sites in China. As of late, VW operates eight car-making sites and nine component facilities in China. VW also recently announced it would make a EUR100 million ($126 million) invest with SAIC Motor Corp. in the Shanghai Volkswagen proving ground in Xinjiang province, western China.

VW also has a joint venture in China with SAIC. The German carmaker has seen significant gains in China, which has helped it offset slow recovery in Europe and slumping sales in other emerging countries.

In fact, VW sees China – its biggest sales region and important earnings contributor -- as crucial to its goal of becoming the largest carmaker in the world by 2018, effectively dethroning current leader Toyota Motor Corp. Juergen Pieper, an analyst at Bankhaus Metzler, remarked that improving links with its partners in China is a must for VW since the German carmaker is “overly dependent on the market."

China accounted for a third of its global deliveries in 2013, with around 3.3 million cars sold in the country in the period. For the current year so far, VW Group – including its Audi and Porsche brands – posted a 15-percent jump in deliveries in China to 2.72 million vehicles. [source: VW]

If you liked the article, share on:

Topics: vw, faw, joint venture

Comments

Recommended

The 2018 Consumer Electric Show is full of exciting new technology for everyone, including the automotive industry. One of the most anticipated is the unveiling of the Linux-based MBUX that...
by - January 22, 2018
With all the photos Mercedes-Benz has been posting of the new 2019 G-Class, not one of those featured the SUV in a light exterior finish, as they were all in...
by - January 22, 2018
When you first glance at the Rhino GX SUV, the first thing that will come to mind is that the vehicle probably has a military style cabin, with thinly padded...
by - January 22, 2018
The Chinese market will soon be getting the exclusive China-only model, Mercedes-Benz GLC-L, for a premium of 15,000 yuan ($2,300) more than the regular model. The difference is actually quite...
by - January 20, 2018
The Bentley Bentayga is set to participate in the famous Pikes Peak International Hill Climb that is slated to take place on June 24th in Colorado. The automaker’s motorsport department...
by - January 19, 2018
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries