VW Spending to Close China Lineup Gaps as SUVs Spared From Cuts

  • Two MPVs and new wagon hitting market; 10 SUV models planned
  • Automaker cutting costs elsewhere in wake of emissions scandal

Volkswagen AG will add two new multipurpose vehicles and a wagon to its sedan-heavy China lineup and plans to sell 10 SUVs within the next few years, as the automaker spares crucial models for the world’s biggest market from emissions scandal spending cuts.

The new Touran L MPV, B8 Variant station wagon and Golf Sportsvan will begin selling in the next few months, Volkswagen China Executive Vice President Soh Weiming said Friday at the Guangzhou auto show. Of the 10 SUVs VW will introduce in China over the next three to four years, six will be locally produced, he said.

“Ten SUVs will probably be one of the biggest portfolios in the market,” said Soh, adding that VW will stick to investment commitments for its largest market by sales. “China is a big market for us, we are going to continue to strive for it.”

Volkswagen will abandon its practice of setting a rolling five-year investment budget for the first time since the 2009 global financial crisis as it grapples with the fallout from the unfolding emissions-cheating scandal, people close to the company’s supervisory board said this week. Soh’s remarks indicate the company hasn’t wavered from plans to close gaps in China after acknowledging earlier this year that it was missing out on the fast-growing market for budget sport utility vehicles and minivans.

Juergen Stackmann, VW brand sales chief, apologized for the diesel emissions scandal at the Guangzhou show while expressing confidence in the company’s future in China. Few of the 11 million vehicles with diesel engines rigged to circumvent emissions tests made it to China. The share of passenger vehicles sold in the country that run on the fuel was 0.4 percent in the 12 months through August, according to data compiled by Bloomberg Intelligence.

Volkswagen will delay plans 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 scandal, China chief Jochem Heizmann, said at an event ahead of the Guangzhou show. VW had 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.

— With assistance by Alexandra Ho

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