Volkswagen wants to build electric vehicles in China from 2013

Article by Christian A., on November 22, 2011

In order to meet the demand for less-polluting vehicles, Volkswagen is aiming to manufacture electric cars in China beginning 2013, Volkswagen China CEO and President Karl-Thomas Neumann revealed. He further stated that the company could develop two EV models with venture partners in China. These models could have a range of 100 kilometers (62 miles) to 200 kilometers.
Currently, the company manufactures SUVs and cars in China with its partnerships with China FAW Group Corp. and SAIC Motor Corp.

The two partnerships have created a prototype EV each. Test fleets will be introduced next year, Neumann disclosed. The European and Chinese governments are getting "more realistic" that the EVs could replace the internal-combustion engines quickly, he added.

Moreover, Neumann said that the company is targeting 10,000 EVs in China by 2018, adding that the rules around the electric vehicle are "not clear." Neumann hopes to get clear guidance from the government soon. The company is relying on China to help it outperform Toyota Motor Corp. and General Motors Co. as the largest carmaker in the world by 2018.

In 2010, VW group sold 7.14 million units -- third in rank only from Toyota with 8.42 million and GM with 8.39 million. Through 2015, VW is shelling out EUR10.6 billion or $14 billion to expand in the nation, which it first entered 30 years ago, as part of an initiative to raise sales in emerging markets.

Volkswagen operates in China through Volkswagen Group China. It has two major partnerships in the country: Shanghai Volkswagen Automotive Co., and FAW-Volkswagen Automotive Co. Through its joint ventures with Chinese companies FAW Group and Shanghai Automotive Industry Corp., Volkswagen currently has nine plants in China producing around 20 models for the Volkswagen, Audi and Skoda brands.

Its joint venture with the FAW Group (FAW-Volkswagen) has five sites in China while partnership with Shanghai Automotive (Shanghai Volkswagen Automotive Co., Ltd.) operates four facilities.

Shanghai Volkswagen is a joint venture between Volkswagen and Shanghai Automotive Industry Corporation. Formed in 1984 in Shanghai, Shanghai Volkswagen is owned 50 percent by Shanghai Automotive Industry Corporation, 40 percent by Volkswagen Group and the remaining 10 percent by Volkswagen China Investment Co. It builds models for the Volkswagen and Skoda brands.

On the other hand, FAW-Volkswagen Automotive Co., Ltd was established in February 1991 as a joint venture between China FAW Group Corporation (51 percent), Volkswagen AG (20 percent), Audi AG (10 percent), and Volkswagen (China) Investment Co., Ltd. (19 percent). FAW-Volkswagen Automotive is considered as first modern car maker to be built in China employing economy of scale from the start.

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