VW to expand influence in Chinese joint ventures

The VW Group apparently wants to increase its influence on one of the joint ventures in the expansion of e-mobility in China and could thus risk conflicts with other partners.

Volkswagen is said to be in talks about the purchase of another factory of the Chinese company JAC, as unspecified sources told Reuters. VW’s two partners, SAIC and FAW, fear being put at a disadvantage if VW turns more towards JAC.

It was only at the end of last year that VW secured a 75 per cent majority stake in the joint venture with JAC, after the Beijing government relaxed the rules on foreign shareholdings. VW had already taken control of one of the plants in the eastern Chinese city of Hefei.

If Volkswagen were to increase its stake in JAC from the current 75 per cent, the group would have to share less profit with its state-owned partner. If nothing else, this would allow VW to accelerate its EV push, among other things. But rumours of a higher stake in JAC would have “shaken” the two state-owned partners SAIC and FAW, according to unnamed sources. The German group “cannot afford a misstep”, writes Reuters. After all, around 40 per cent of its turnover and half of its profits can be attributed primarily to ventures with SAIC and FAW.

Volkswagen, on the other hand, told Reuters that the portfolio of the joint venture would not directly compete with those of its other joint businesses in China, but rather complement each other. FAW, SAIC and also JAC, however, have so far declined to comment.



about „VW to expand influence in Chinese joint ventures“

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