Volkswagen has pledged to bring worldclass standards to its Chinese joint ventures, said Dr Bernd Leissner, president of the German company’s Asia-Pacific operations. Prices of domestically produced cars are around 30 per cent higher than world average and one way the company hopes to cut costs is to increase local production.
Volkswagen will also increase co-operation between its two Chinese joint ventures – First Automobile Works in Changchun and Shanghai Automotive Industries Corp (SAIC) – instituting joint purchasing of components and a joint network of sales and servicing centres.
Leissner also said that Volkswagen had resolved its dispute with SAIC over the use of VW components in cars produced by SAIC Chery Automobile of Anhui province, the Financial Times said. SAIC holds a 20 per cent stake in the company, whose Chery cars are a popular domestic rival to the VW models. Chery has now agreed to discontinue using them, saying it had recently developed its own replacements for the disputed components.