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Business / Auto China

Volkswagen extends China joint venture by 25 years to tighten market grip

(Agencies) Updated: 2014-10-11 11:26

The length of the extension appears customary. VW's second joint venture with SAIC was extended in 2002 by 28 years until 2030. BMW in June extended its partnership with Brilliance China Automotive Holdings until 2028.

Volkswagen extends China joint venture by 25 years to tighten market grip

China, Germany sign $18.1 billion deals

Volkswagen extends China joint venture by 25 years to tighten market grip

FAW-VW antitrust probe sparked by customer complaint

Europe's largest carmaker said in July it would invest 2 billion euros ($2.53 billion) with FAW to build two more assembly plants. The German group currently operates eight car-making factories and nine component plants in China.

VW said it would spend about 100 million euros with SAIC on a new test site and proving ground near the northwestern town of Urumqi where the carmaker opened a factory last year.

The German group has also been in talks with FAW for some time about a possible increase of its 40-percent holding in the venture.

Many industries in China have come under the spotlight as authorities step up efforts to bring companies into compliance with an anti-monopoly law enacted in 2008. The car sector has been under particular scrutiny amid accusations by state media that global carmakers are overcharging customers.

Still, Li, in a guest commentary for German newspaper Die Welt published on Oct 8, said Chinese authorities would "favorably examine" VW's quest for a larger stake in FAW. In return, his government hopes Germany will allow Chinese companies to bid for German high-speed rail projects.

Separately, German automaker Daimler and Beijing Automotive Industry Corp agreed to deepen a strategic partnership that will include further localization of luxury cars by the German manufacturer worth about 1 billion euros, Daimler said on Friday.

 

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