Volkswagen-FAW joint venture extended by 25 years
Volkswagen extended its joint venture with China FAW Group Corp by 25 years, as the German manufacturer steps up its bid for the global No1 spot by targeting an increasing share of the world's biggest car market.
Volkswagen extended its joint venture with China FAW Group Corp by 25 years, as the German manufacturer steps up its bid for the global No1 spot by targeting an increasing share of the world's biggest car market.
European and US carmakers are keen to raise their presence in China, but have been confined to owning 50 per cent or less of joint venture companies run together with Chinese enterprises.
Although Chinese demand is slowing somewhat, car sales in the world's No2 economy have still been up over 10 per cent this year, helping global players such as Volkswagen cope with a fragile recovery in its European home market after a six-year slump.
Volkswagen, one of the first global carmakers to establish production facilities in China during the 1980s, has the biggest manufacturing output and has been working with FAW for over two decades.
By extending the joint venture from 2016 to 2041, Volkswagen and FAW will expand their R&D activities and step up work on fuel-saving technology.
"Enhancing ties with its Chinese partners is a must for VW, which is overly dependent on the market," said Frankfurt-based Bankhaus Metzler analyst Juergen Pieper.