Fresh off the leadership crisis that has beleaguered the world’s second largest automaker and the biggest in Europe, Volkswagen AG has moved to dismiss any plans of purchases or mergers with rivals, beyond its already announced plan to increase the stake of its Chinese joint venture.
The news also comes just as Sergio Marchionne, chief executive officer of Fiat Chrysler Automobiles, during the conference call to release the company’s first quarter financial results, also reiterated his belief that global auto players should pull resources together and further consolidate the auto industry. But, on the same day, Volkswagen Ag chief finance officer Hans Dieter Poetsch said the world’s second biggest and Europe’s largest automaker has no intentions to seek a merger of acquisition. They will only concentrate for the time being on the ongoing negotiations with their Chinese joint venture partner FAW in a bid to lift the current ownership stake in the common company. “We are in a process of negotiations with our joint venture partner (FAW), also about the possibility of an increase in our stake. Apart from this, there is nothing else on the table with regard to M&A,” commented the executive. He added during the conference call the carmaker was “still investigating” the idea of introducing an affordable, low-cost model in the country – though the final decision was not taken yet.
The automaker has been mulling the addition of a entry-level model or models for the Chinese market in a drive to fend off the domestic brand competitors and the approval of the plan might hinge on the core brand’s ability to hit savings goals.