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China Daily Website

VW mulls bigger stake in JV

Updated: 2013-09-26 07:13
By Li Fangfang ( China Daily)

German firm is in talks with China's FAW

Germany-based auto conglomerate Volkswagen AG may take a larger stake in its Chinese joint venture with local partner FAW Group Corp, the head of VW in China said.

VW mulls bigger stake in JV

Volkswagen offers 80 models in China, 20 of which are domestically produced. Huang Jiexian / For China Daily

"We are now in very good discussions with our Chinese partner FAW on further cooperation for our joint venture, FAW Volkswagen Automotive Co Ltd, possibly in the equity area," said Jochem Heizmann, board member of Volkswagen and president and chief executive officer of Volkswagen Group China.

"We have had a very long and successful cooperation with FAW in the past 20 years. As the previous contract for FAW Volkswagen is going to expire in 2016, both sides expect to extend the partnership another 20 years or more," he said.

Volkswagen Chief Executive Officer Martin Winterkorn earlier this month told German media at the Frankfurt auto show that the company was negotiating with FAW to increase its stake in the joint venture from the current 40 percent to 50 percent.

However, Heizmann declined to disclose further details about any stake increase, saying: "Volkswagen hopes to have more shares in this joint venture."

Volkswagen also runs a 50-50 joint venture in China with Shanghai-based SAIC Group.

Heizmann told China Daily that talks on the extended contract also included strategic cooperation in more and different fields, including new product introduction, used cars and financing.

Volkswagen offers 80 models in China, 20 of which are domestically produced.

"By 2015, we will expand our local product portfolio to 91 models in our second home, with 30 produced here in China," said Heizmann. "The increasing local production proportion also indicates that Volkswagen has made China one of its most important markets."

The German automaker on Wednesday announced the opening of a new factory in Foshan, Guangdong province, under the joint venture FAW Volkswagen, along with the start of production for the first model, the new Golf.

"Volkswagen Group was the first automaker to establish local production in China in 1983, and it is today pioneering new development with our 'Go South' strategy in Foshan, as well as in Chengdu and Urumqi through the 'Go West' strategy," said Heizmann.

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