Great Wall Motor Co. surged to a record in Hong Kong trading on speculation that Volkswagen AG is in talks to build affordable cars with the Chinese company.
Great Wall rose 9 percent to HK$60.25 as of 2:04 p.m., headed for the highest close since December 2003. Hong Kong’s benchmark Hang Seng Index gained 0.5 percent. Xu Chengzhi, a spokesman for the Chinese company, didn’t answer a call to his mobile phone or reply to a text message seeking comment. Larissa Braun, a spokeswoman for Volkswagen in China, declined to comment, saying the company doesn’t engage in speculation.
The two companies are in talks on building affordable cars, as well as Volkswagen taking a stake in Great Wall, Manager Magazin said, citing unnamed company sources. Following initial talks, the companies are now studying further details on possible cooperation, with Volkswagen sales head Christian Klingler leading the project, according to the report.
Volkswagen said this week it won’t beat industrywide growth this year in China, its largest market, after being caught out by a surge in demand for budget sport-utility vehicles and minivans. The carmaker is “working hard” on those segments, Jochem Heizmann, Volkswagen’s China chief, said at an event before the Shanghai auto show.
Volkswagen said last month it will provide an update on adding a no-frills brand in China in the “foreseeable future.”
— With assistance by Tian Ying, and Alexandra Ho