Volkswagen Group has reportedly reached agreement with Chinese local partner FAW Group to increase its holding in their car-making joint venture to 49% from 40%.
Local media reports say that FAW’s holding in the venture has now been correspondingly reduced to 51% from 60%, the local partner retaining overall control.
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The reported move follows recent announcements by Volkswagen of increased investment to position for growth in China.
Last month approval was granted by the Chinese government for Volkswagen to build two more vehicle assembly plants in China, working with its two local partners.
A new factory at Yizheng, in Jiangsu Province in eastern China, is to be developed together with partner Shanghai Volkswagen, and a plant at Foshan, in Guangdong Province in southern China, will be built together with the FAW-Volkswagen joint venture.
Each of the two plants will be designed for an annual capacity of 300,000 vehicles and production is due to start in 2013. Volkswagen Group is aiming to increase annual production capacity in China to 3m vehicles in the medium-term and has boosted its investment program for China to EUR10.6bn for the period from 2011 to 2015.
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By GlobalDataIn addition to the two new plants, plans have already been announced to expand production capacity at each of the existing Nanjing and Chengdu plants to between 300,000 and 350,000 vehicles per year.
In the first six months of 2011, VW Group delivered 1.11m vehicles in China, 16.4% up on last year.
FAW Group is currently planning a restructuring of its capital base under an IPO in China.
