Volkswagen to expand co-operation with China

Volkswagen may expand co-operation with China’s Anhui Jianghuai Automobile beyond electric cars to jointly develop and build commercial vehicles in the world’s largest vehicle market.

The German group and Anhui Jianghuai Automobile announced in June they were to set up a joint venture to develop and build zero-emission passenger cars as Volkswagen is pushing efforts to achieve the Chinese government’s production and sales quotas for new-energy vehicles.

VW yesterday said it was looking along with its commercial vehicles division at deepening the co-operation with Anhui Jianghuai Automobile to include the design, technology, product quality and development of multi-function vehicles.

The venture would affect combustion engined and alternative-energy powered vehicles, would be owned equally by Anhui Jianghuai Automobile and VW and would be based in Anhui Jianghuai Automobile’s home town of Hefei.

“VW Commercial Vehicles has a growing number of loyal customers in China,” executive Joern Hasenfuss said. “But there are significantly more opportunities,” he said.

Under the tie-up, VW and Anhui Jianghuai Automobile could jointly tap growing demand for light pick-up trucks in China while the German group would also save customs duties by building its multi-van and Caddy vehicles at Anhui Jianghuai Automobile facilities, said analysts.

It’s also the latest evidence of VW’s foreign expansion not being confined to its passenger car operations.

Meanwhile, the maker of Peugeot and Citroen cars, PSA, will start making commercial vans at its Russian plant in early 2018 as it seeks to triple sales volumes outside its main European markets.

The Kaluga plant will add the Peugeot Expert and Citroen Jumpy vans to its production line of passenger cars from the first quarter of next year.

A larger range is key for the Peugeot and Citroen brands’ prospects in Russia, Christophe Bergerand, executive vice president of Groupe PSA, said.

Russia’s car market is rebounding after several years of decline during an economic slowdown brought on by the slump in world oil prices and international sanctions against Moscow.

Reuters


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