Getty Images
Industryweek 13678 Volkswagen Logo
Industryweek 13678 Volkswagen Logo
Industryweek 13678 Volkswagen Logo
Industryweek 13678 Volkswagen Logo
Industryweek 13678 Volkswagen Logo

VW Puts off China Investment Amid Costly Emissions Scandal

Nov. 19, 2015
China--the world's biggest auto market--is crucial for VW, which delivered 3.67 million cars in the country last year.

German automaker Volkswagen, tainted by an emissions scandal expected to cost it billions, said Thursday it had postponed a planned investment in China.

"In light of the current situation and the review of our investments, the company has decided to delay by two or three years the increase of its stake in its joint venture with FAW," said a VW spokesman.

Volkswagen was one of the earliest foreign entrants to the China market and produces domestically through joint ventures with China's largest automaker SAIC, based in Shanghai, and number three China FAW Group in the northeastern province of Jilin.

China--the world's biggest auto market--is crucial for VW, which delivered 3.67 million cars in the country last year, exceeding US rival General Motors which sold 3.54 million, figures from the companies showed.

Volkswagen was confirming remarks made on Wednesday by the head of Volkswagen China, Jochem Heizmann, at the Canton car show in southern China. 

VW currently has a 40% stake in the FAW joint venture and planned to lift it to 49.9 %--the same stake it has in the SAIC venture.  

The cost of the investment "was still being evaluated", Volkswagen said, adding that China remained "a very important country" to the company as its biggest market.

"Volkswagen is reviewing all its investment plans -- those that are not considered essential will be canceled or delayed," the spokesman said. 

Volkswagen continues to reel from revelations in September that its diesel cars were equipped with software "defeat devices" designed to cheat in emissions tests.   

It has estimated that some 11 million diesel vehicles worldwide have been fitted with the software.

The risk of tens of billions in fines, legal settlements and repair costs has wiped around 40% off the automaker's market capitalization.

Copyright Agence France-Presse, 2015

Popular Sponsored Recommendations

Learn How Manufacturers like 3M Cater to Digital Buyers to Increase Sales

Aug. 13, 2023
In this article, you'll learn how manufacturers can balance educating and guiding their buyers through their complex buying process with a digital first approach to product discovery...

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!