VW announced it has extended its partnership with FAW Group beyond the expiration date of 2016.
The joint venture, which manufactures VW and Audi cars, not only extended its expiration date, but also its product portfolio. This move highlights the importance of China, the world’s largest auto market, for VW, which recently announced it will invest 14 billion euro ($18.07 billion) in the country. China is also a highly competitive market as many automakers, including GM, try to increase their presence here.
Recent reports from German newspapers were saying that FAW infringed on VW’s intellectual property rights, but the German automaker denied these rumors, declaring that neither of its venture partners had infringed on one another’s rights in the past years. According to the German newspaper Handelsblatt, FAW had illegally copied and collected engine technology and information about key parts for VW gearbox.
VW’s plan is to surpass GM and Toyota and become the world’s largest automaker by 2018 and to achieve its goal it will also invest 9.8 billion euro ($12.7 billion) in the country in the following two years. VW-FAW joint venture has produced the first Jetta in 1991 and since then it has sold more than 6 million vehicles in China.