Volkswagen plans for 1 billion euro joint venture in China — Reuters - PingWest

Volkswagen plans for 1 billion euro joint venture in China — Reuters

Volkswagen plans for 1 billion euro joint venture in China — Reuters

October 9, 2022 6:05 pm

German carmaker Volkswagen is reportedly planning to invest over 1 billion euros in a joint venture in China for software production, according to Reuters quoting sources with knowledge of the matter.

According to Reuters citing sources, the official announcement is expected next week, after election results in Lower Saxony, a major German state in northwestern Germany are final. Lower Saxony is Volkswagen's second-largest shareholder with two seats on its supervisory board, and has about 11% shares and 20% voting rights.

Currently, Volkswagen already holds a 75% stake in its venture with JAC, a 50% stake with SAIC and 40% with FAW. The carmaker partakes in many JVs in China, where it makes 40% of sales and half of its profits.

The company is reportedly planning to build the industry's largest fleet of electric vehicles. The company's goal is to replace Tesla as the leader in the electric car industry by 2025, according to Herbert Diess, the chief executive of Volkswagen at World Economic Forum in May.

Software could play an important role as automakers such as Volkswagen Group join the ranks of car companies hoping to overtake Tesla in the future. Volkswagen sees the automobile industry to be focusing on electric drive, connectivity and autonomous driving in the future, and has invested around 27 billion euros in the digitalization of product and corporation by 2025, according to the company.

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