VW to Delay China Venture Stake Increase Due to Scandal CostBloomberg News
German automaker owns 40% of venture with China FAW Group
VW faces billions of euros in costs after emissions scandal
Volkswagen AG is delaying its plan to boost its stake in its joint venture with China FAW Group Corp. by two to three years after reviewing the investment in the wake of its emissions-cheating scandal.
The comments by VW China chief Jochem Heizmann, made at an event ahead of the Guangzhou Auto Show on Wednesday and confirmed by the company, come as Volkswagen faces billions of euros in costs for its emissions cheating scandal. VW faces a Friday deadline to present a remedy plan to California regulators for 4-cylinder diesel engines that spew as much as 40 times the allowed amount of smog-producing nitrogen oxide.
The FAW partnership was forged 1991 in Changchun for licensed production of the Audi 100 sedan. VW has been in talks to raise its 40 percent stake in the joint venture with FAW for a more balanced structure similar to the 50-50 percent pact for its other venture with SAIC Motor Corp.
Chief Executive Officer Matthias Mueller said as recently as Oct. 28 that the company was still working on a possible increase in the FAW stake. The German carmaker has been in talk to lift its stake in the FAW joint venture, and Chairman Hans Dieter Poetsch has said a decision may be reached by the end of this year.
Volkswagen’s shares rose 3.1 percent to 104.50 euros at 11:15 a.m. in Frankfurt.
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— With assistance by Tian Ying