Sections

ideals
Business Essentials for Professionals



$4.4bn To Be Invested In China By VW And Its Chinese In 2020


11/23/2019


$4.4bn To Be Invested In China By VW And Its Chinese In 2020
An investment of around 4 billion euros ($4.43 billion) to be made in China is being planned by the German auto major Volkswagen Group, together with its Chinese partners. The German auto major said that the focus of the largest portion of the investment will be development of e-mobility capabilities.
 
One car out of every five cars sold in China is accounted for by Volkswagen currently, said the German company. It was also amongst the first companies ever to set up manufacturing plants in China and the company had made its first contact with the Chinese market back in the late 1970s, the company said. Chinese firms SAIC Motor and FAW Group now partner with Volkswagen to constitute a very large joint venture for the domestic market in China.
 
According to the announcement made by the company, development of e-mobility technology and capability will draw in about 40 per cent of the 4 billion euro investment that it plans to make in China. Manufacturing of all-electric cars in two factories in Foshun and Shanghai is at the centre of focus of the electrification strategy of the company China. The production capacity of the two aforesaid production facilities combined will reach a capacity of 600,000 e-cars per year by October 2020, the German company said. Within the next six years, plans for coming out with 30 different types of electric car in China was also announced by Volkswagen.
 
Success in e-mobility “will be a key driver for reaching our sustainability target, becoming net carbon neutral by 2050”m said the CEO of Volkswagen Group China, Stephan Wollenstein, in a statement.
 
So far in the current year, 3.34 million vehicles to be sold in China have already been delivered by it, claimed a statement from the Volkswagen Group China. During the entire of 2018, the market share of the Chinese joint venture of Volkswagen has increased from about 18.5 per cent to 19.5 per cent, the division added.
 
The news of the new investment in China however had little impact on the share price of the company which mover up by a mere 0.4 per cent. However, for the entire year so far, there has been an almost 30 per cent growth in the stock price of the automaker. But compared to its share price on September 19 of 2015, the current rise has only been 4.9 per cent. September 15 is the date when the first revelation of the diesel emission cheating scandal in the engaged into by the company in the United States first came out into the open and following which the company has seen its share prices and market value reach rock bottom while also impacting sale and brand image.
 
(Source: www.cnbc.com)