VW extends co-operation with Chinese JV partner FAW Group for another 25 years

by Autocar Pro News Desk , 12 Oct 2014

After over 20 years of successful cooperation between the Volkswagen Group and the Chinese JV partner First Automotive Works (FAW), the two companies have extended the existing partnership for another 25 years until the year 2041.

In addition, the Volkswagen Group and the Chinese JV partner SAIC plan to invest in a testing and proving ground of Shanghai Volkswagen (SVW) in the western Chinese province of Xinjiang. 

Both agreements were signed a couple of days ago in Berlin in the presence of Li Keqiang, the prime minister 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 Aktiengesellschaft. 

A joint memorandum with the Chinese Ministry of Education to cooperate in the field of vocational training was also signed in Wolfsburg.

Volkswagen and FAW aim to extend their cooperation as regards existing R&D  activities in China and develop new business especially in the field of alternative drive systems in the coming years. The contract was signed by Prof. Dr. Jochem Heizmann, Member of the Board of Volkswagen Aktiengesellschaft for the business as well as China President and CEO of Volkswagen Group China, and Xu Jianyi, Chairman of FAW Group. 

In July this year, Volkswagen and FAW decided to expand their production capacity with two new plants in Qingdao and Tianjin. "Together with its strong partners, Volkswagen in China on innovation, green technologies and highly trained employees. Today's agreements pave the way that the automobile industry in China developed in a sustainable and Volkswagen Group will benefit from the growth with its joint ventures," Winterkorn said on the occasion of the contract signing.

In Western China, Volkswagen is expanding its activities further and invested in the Xinjiang region, together with its Chinese JV  partner SAIC around 100 million euros (Rs 776 crore) in a new testing and proving ground for models from Shanghai Volkswagen. The test facility will be built southeast of the location Urumqi, started operations in August 2013. 

A joint declaration have Heizmann and Chen Zhixin, president of SAIC Motor Corporation, also signed today. "Our success in China would not be without our long-standing JV partnerships have been possible," said Heizmann. "We are convinced that by the sealed today extending the cooperation with FAW are placed strategically, for the future. With our test site, we carry the latest testing methods in China." 

Prof. Dr. Horst Neumann, Member of the Board of Management of Volkswagen Aktiengesellschaft for the business personnel, organization and IT, said: "The dual system of vocational training, such as Volkswagen will implement almost worldwide, brings together theory and practice and ensures recruits high level of expertise. Therefore, we want to win even more schools of higher vocational education for the dual vocational training in China."

Together with the Chinese Minister of Education, Prof. Guiren yuan signed Neumann in Wolfsburg a memorandum on education cooperation, with the Volkswagen Group and China's government to expand consolidate the dual system of vocational education in China. Plans include nine competence centres for teacher training and teaching programs that dovetail closely in accordance with the German educational principle theory and practice. Teachers sites specialize in tooling, automation, chassis and motor vehicle technology and pedagogy. The first centers have already been established in Changchun and Yizheng. 

The Volkswagen Group is one of the most successful companies in the Chinese automotive industry. In China, Volkswagen produced jointly with the joint venture partners SAIC and FAW models from the Volkswagen brand passenger cars, Audi and ŠKODA for the Chinese market. The vehicle manufacturing includes the local self-sufficiency in engine and automotive components with a. 

Overall, the Volkswagen Group in China is represented at 17 production sites with eight vehicle components and nine locations. To enhance the production of vehicles, Shanghai Volkswagen has already announced the construction of a new site in Changsha. FAW-Volkswagen will also build two new plants in Qingdao and Tianjin.   During the first three quarters of 2014, the Volkswagen Group China surpassed together with its Chinese joint ventures Shanghai Volkswagen and FAW-Volkswagen brand delivered 2.7 million vehicles, which an increase of 15.2 percent over the previous year's figure.