Volkswagen Plans to Lift Stake in Chinese Joint Venture With FAWJonathan Morgan
Volkswagen AG, Europe’s largest carmaker, is in talks to increase its stake in a joint venture with FAW CAR Co. as part of a strategy to expand in China.
VW plans to lift its stake to 50 percent from the current 40 percent, Chief Executive Officer Martin Winterkorn said in an interview published on Sunday in Frankfurter Allgemeine Sonntagszeitung. Eric Felber, a spokesman for Wolfsburg, Germany-based VW, confirmed Winterkorn’s comments.
The company operates a second Chinese joint venture with SAIC Motor Corp. Growth in China has helped Volkswagen offset weaker deliveries of mainstream vehicles in Europe, where industrywide demand is sliding to a 20-year low.
China is crucial to VW’s goal of leapfrogging General Motors Co. and Toyota Motor Corp. to become the world’s No. 1 automaker by 2018. China, VW’s top sales region, accounted for 31 percent of the German automaker’s 9.21 million deliveries last year.
Backed by its growing luxury-car brands Audi and Porsche, VW targets full-year operating profit on last year’s level, even after earnings in the first six months of 2013 declined 12 percent. The company predicts revenue will rise this year, driven by higher auto sales.
Winterkorn told FAZ am Sonntag he wants to remain CEO “at least” until his contract expires in 2016.
Winterkorn last week dismissed concerns that a recent departure of executives leaves the company without viable candidates to succeed him as CEO.
“There are enough young people up and coming,” Winterkorn, 66, said at a Volkswagen event on Sept. 9 in Frankfurt. The succession issue is “of course” being addressed internally, he said.
Karl-Thomas Neumann, head of the China operations; Audi development chief Wolfgang Duerheimer; and Audi sales chief Peter Schwarzenbauer have all left within the last year.
Winterkorn is seen as the probable successor to Chairman Ferdinand Piech, 76, when he eventually decides to retire. The two are close confidantes and the masterminds behind VW’s global expansion and financial success in recent years.
VW denied a Sept. 6 report in German newspaper Handelsblatt saying Piech would resign within the next months because of health issues. The company said in a statement that Winterkorn and Piech will continue to serve in their current jobs “for a long time.”