WOLFSBURG (dpa-AFX) - German auto major Volkswagen Group (VKW.L, VLKAF.PK, VOW.BE) announced Wednesday that it is extending its Chinese joint venture deal with its Chinese partner SAIC Motors by 10 years, until 2040. The collaboration will strengthen the SAIC VOLKSWAGEN JV with consistent strategic initiatives in the areas of product portfolio, production, and decarbonization.
Meanwhile, media reported that the German company is set to sell its facility in Xinjiang, China and exit the region in a deal with SAIC Motors. The move comes after sustained pressure from human rights groups following alleged violation of human rights of Uyghur Muslims. These included claims of forced labour and detention camps.
As per the reports, the plant will be bought by Shanghai Motor Vehicle Inspection Certification or SMVIC, a unit of the state-owned Shanghai Lingang Development Group. The deal price remains undisclosed.
An audit commissioned by Volkswagen reportedly found no indication of forced labour at its Xinjiang facility, but it drew criticism from human rights groups for lack of adherence to internationally recognised SA8000 standards.
Regarding the extension of its JV deal, Volkswagen noted that by 2030, the JV will introduce a total of 18 new models to the market, and 15 vehicles of those are being developed exclusively for the Chinese market.
The original joint venture agreement was valid until 2030.
Ralf Brandstätter, Member of the Board of Management of Volkswagen AG for China, said, 'Together, we established one of the first international joint ventures in the region 40 years ago. With this long-term contract extension, we underline the importance of this collaboration and the significance of the Chinese market for the Volkswagen Group. We are accelerating the transformation of SAIC VOLKSWAGEN in line with our 'In China, for China' strategy on all levels, bringing a new generation of electrified vehicles onto the road by 2026, and thus making our partnership economically and technologically future proof.'
Volkswagen Group noted that over the next three years alone, the firm and its brands will bring 40 new models to the Chinese market, half of which will be electrified. By 2030, the Group will offer more than 30 electric models in China.
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