Volkswagen extends cooperation with China joint venture partner FAW Group for 25 more years; enhanced R&D on alt drive systems
After 20 years of cooperation, the Volkswagen Group and its Chinese joint venture partner First Automotive Works (FAW) are extending their present partnership for a further 25 years—i.e., until the year 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; Dr. Angela Merkel, Chancellor of the Federal Republic of Germany; and Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG. A joint memorandum concluded with the Chinese Ministry of Education concerning cooperation in the field of vocational training was signed yesterday in Wolfsburg.
Based on the extended cooperation, Volkswagen and FAW will be able to expand significantly their 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.
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 ($126 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. Heizmann and Chen Zhixin, President of SAIC Motor Corporation, also signed a joint agreement to this effect.
Under the memorandum on cooperation in the field of vocational training, the Volkswagen Group and the Chinese government are undertaking to expand the dual vocational training system in China. Plans include nine centers of competence for teacher training and for teaching programs that closely link theory and practice in line with the German vocational training principle. These educational facilities will specialize in tooling, automation technology, bodyshell technology and automotive technology as well as pedagogy. The first centers have already been set up in Changchun and Yizheng.
The Volkswagen Group is one of the most successful companies in the Chinese automobile industry. 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% on the comparable prior-year period. This accounts for more than one-third (36.5%) of the group’s total worldwide deliveries of 7.4 million vehicles during the same period.