Volkswagen’s equity ratio increase is approved by the Chinese government

The Chinese government has approved Volkswagen’s equity ratio increase, and arranged a work team for both investors of the joint venture, said Jochem Heizmann, member of the board of directors of Volkswagen, President and CEO of Volkswagen China as well.

According to Professor Heizmann, both investors are together entrusting outsourced national registered audits and experts to make assessment of stock value, and the whole transnational equity transfer process will take sometime.

Professor Heizmann also believed that there is huge growing potential of Chinese car market as current fluctuations will be a short-lived one during the whole economic cycle, and that Chinese car market will resume a high level of growth after current revisions.

Professor Heizmann anticipated further polarization of carmarket development in different areas in China, with first-to-second-tier cities to see limited growth, and third-to-fifth-tier cities bound for high-speed growth. And the expansion of China’s middle class with higher salaries will lay as olid foundation for the growth of car market.

For the next four years, Volkswagen is going to launch in Chinese market SUV of different sizes, some of which will be made locally in China. And Next generation of China-made Volkswagen Tiguan will see IDAS (ITS Deployment Analysis System) and PHEV (Plug in Hybrid Electric Vehicle) as well.

According to Heizmann, Volkswagen’s economic car brand will be independent from brands like Volkswagen and Skoda, with lower selling prices. Starting from 2018, new economic brands will manufacture Sedans, Hatchbacks and SUVs, which will all be introduced into Chinese market. The joint venture FAW-Volkswagen is one of the potential manufacturing bases, with research ongoing.

Volkswagen plans to launchPHEVs and all-electric vehicles in market of all classes under new energy car plan. Hereinto, Audi A6 PHEV will be made in China under the brand of FAW-Volkswagen. Moreover, Volkswagen will also launch one domestic car model superior to Magotan and Passat, with plug-in hybrid power system and traditional gasoline engine for choices.

In Europe, the limit on carbon dioxide emission in 100 kilometers is 95 gram, and America also published its stricter standard on oil consumption, which has been the global trend. With larger influx of new energy cars into the market, Volkswagen may achieve the sales goal of hundreds of thousands of units in new energy car market in China by 2020.

Heizmann also disclosed the possibility of joint venture exporting their products out of China.