Volkswagen rules out acquisitions and mergers, focuses on China JV
Volkswagen’s finance chief has dismissed speculation of acquisitions or mergers, confirming the group is concentrating on talks to raise its stake in its Chinese joint venture with FAW.
Volkswagen has ruled out any immediate plans for acquisitions or mergers, with chief finance officer Hans Dieter Pötsch stating the group’s attention remains on its Chinese operations. The announcement came as speculation around industry consolidation continued, fuelled by comments from Fiat Chrysler’s Sergio Marchionne.
Speaking during a conference call following the release of Volkswagen’s quarterly results, Pötsch said the company is in negotiations with its Chinese joint venture partner FAW about raising its stake in the partnership. He clarified that, aside from this, “there is nothing else on the table with regard to M&A.”
Volkswagen’s position comes as Marchionne, the CEO of Fiat Chrysler Automobiles, has again called for global carmakers to consolidate resources. Marchionne has been vocal about the need for mergers in the sector, but Volkswagen’s leadership has made clear it is not pursuing such moves at present. Opel’s CEO Karl-Thomas Neumann has also dismissed recent merger speculation involving Fiat Chrysler.
Focus on Chinese joint venture
Volkswagen’s main strategic activity remains its relationship with FAW in China. The company is seeking to increase its equity stake in the joint venture, which is already one of the largest foreign partnerships in the Chinese car market. No details have been given about the size of the potential increase or the likely timeframe.
Volkswagen is also still assessing whether to introduce a low-cost model for China. The group has been considering such a move to compete with domestic brands, but Pötsch said the decision would depend on the brand’s ability to achieve required cost savings. No final decision has been made.
Industry context and recent speculation
The comments from Volkswagen follow a period of leadership upheaval and ongoing debate within the sector about the value of mergers and acquisitions. While some manufacturers, including Fiat Chrysler, have argued consolidation is necessary to manage costs and compete globally, others, like Volkswagen and Opel, are taking a more cautious approach. Recent years have seen several high-profile merger discussions stall or fall through, such as the abandoned Koenigsegg-Saab deal (/koenigsegg-terminate-agreement-for-purchase-of-saab) and Opel’s own rejection of Fiat Chrysler overtures (/opels-boss-says-no-deal-with-fiat-chrysler-automobiles).
