Nov. 29 (Bloomberg) -- Volkswagen AG, Europe’s largest carmaker, has reached an agreement to extend its joint venture with China’s FAW Group for another 25 years, after concluding that neither side infringed on technology patents.
The two companies will extend their partnership beyond 2016, when the current contract expires, expand their product portfolio and jointly develop new business activities, the Wolfsburg, Germany-based carmaker said in a statement today.
The agreement was reached after a meeting between VW Chief Executive Officer Martin Winterkorn and FAW Group Chairman Xu Jianyi, according to the statement. Both partners discussed the issue of engine and gear box patents and concluded no rights were infringed, the company said in a statement.
China is key to VW’s goal of overtaking General Motors Co. and Toyota Motor Corp. as the world’s biggest automaker by 2018. The German carmaker, which makes Jetta and Audi A6L sedans with FAW, has pledged to invest 9.8 billion euros ($12.7 billion) in China through 2015.
The German newspaper Handelsblatt reported in July that FAW had illegally copied engine technology and collected offers from suppliers for key parts to a VW gearbox, without saying where it got the information. Christoph Adomat, a VW spokesman, said then that it was looking into the issue.
To contact Bloomberg News staff for this story: Liza Lin in Shanghai at email@example.com
To contact the editor responsible for this story: Young-Sam Cho at firstname.lastname@example.org