FAW-VW denies stock ratio adjustment plans are completed, states that negotiations are still in progress

There have been several reports circulating in the Chinese media that Sino-German joint venture FAW Volkswagen is agreeing to a stock ratio adjustment plan that will involve it gaining the right to produce several new SUV models if parent FAW Group relinquishes a 9% stake in the company. According to a report appearing on auto.sina.com.cn today, FAW-VW has denied these allegations.

“Any stock ratio adjustment plans will be done in accordance to the laws and legislations,” FAW-VW Spokesman and PR Director Li Pengcheng stated, adding that the JV’s asset valuation has not been completed and that all parties are currently engaging in negotiations.

Mr. Li’s comments were backed up by VW China’s PR department, whose official statement read “the asset valuation process is currently in progress.” In a later interview, the department stressed that such a stock ratio adjustment would involve an “international transfer of stockholding rights” and that “the entire process would require a certain amount of time to complete.”

Furthermore, at last month’s Shanghai International Automobile Exhibition, VW China CEO Jochem Heizmann stated that any stock ratio adjustment plans would take around a year to decide upon.

Mr. Li added that FAW-VW gaining the rights to produce new SUVs has nothing to do with any stock ratio adjustments. “Updating products and bringing over new vehicles is part of [normal business procedures] and has nothing to do with issues related to stock ratio adjustments,” Mr. Li stated.

FAW-VW has been the subject of intense media attention since its stock ratio adjustment plans were released last October.