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VW Extends Partnership with Chinese Automaker

October 21, 2014

After 20 years cooperating, the Volkswagen Group and its Chinese joint venture partner First Automotive Works (FAW) are extending their present partnership for a further 25 years, until 2041. In addition, the Volkswagen Group and the Chinese joint venture partner SAIC are investing in the Shanghai Volkswagen (SVW) proving ground in Xinjiang province, western China. Both agreements were signed in Berlin in the presence of Li Keqiang, premier of the People’s Republic of China, Angela Merkel, chancellor of the Federal Republic of Germany, and Martin Winterkorn, Ph.D., chairman of the Board of Management of Volkswagen Aktiengesellschaft.

Volkswagen said it and FAW will be able to significantly expand existing research and development activities in China and move into new business areas in the coming years, above all in the field of alternative drive technologies. In July of this year, Volkswagen and FAW agreed to expand their production capacity by building two new plants in Qingdao and Tianjin.

Volkswagen is further expanding its activities in western China – and is joining up with the Chinese joint venture partner SAIC to invest some €100 million in a new proving ground in the Xinjiang region to test models from Shanghai Volkswagen. The facility will be built to the south east of the Urumqi plant commissioned in August 2013, according to Volkswagen.

Together with its joint venture partners SAIC and FAW, the Volkswagen Group builds models from the Volkswagen Passenger Cars, Audi, and ŠKODA brands for the Chinese market. Vehicle production includes engines and components manufactured locally by the Group and its partners. In total, the Volkswagen Group has a presence at 17 production locations in China comprising eight vehicle sites and nine component sites. Shanghai Volkswagen has already announced the building of a new factory in Changsha to expand vehicle production capacity. Furthermore, FAW-Volkswagen is to construct two new production plants in Qingdao and Tianjin.

In the first three quarters of this year, Volkswagen Group China together with its Chinese joint ventures Shanghai Volkswagen and FAW-Volkswagen delivered more than 2.7 million vehicles, an increase of 15.2 percent on the comparable prior-year period, according to the automaker.

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