Text/Teng Sanmao

Product of Che Tuteng, please indicate the source when reprinting

●?●?●

A few days ago, according to Germany's Automobilwoche reported that Audi is negotiating with FAW Group to establish a new cooperative company in China. Its main business will be electric vehicles. The new company will be based on the PPE platform jointly developed by Audi and Porsche and build New factory, deepen cooperation.

In this regard, some domestic media contacted Audi China. The other party stated that the cooperation with FAW Group has been very successful over the past three decades, but it was unable to comment on the relevant rumors in media reports. However, what is interesting is that Audi China has not explicitly denied this matter.

Reviewing the history of the joint venture between the two - FAW-Volkswagen, in February 1991, China FAW Co., Ltd., Germany's Volkswagen AG, Audi AG and Volkswagen (China) Investment Co., Ltd. and a joint venture jointly established FAW-Volkswagen, which is my country's first modern passenger car company that started construction based on economic scale.

After nearly 30 years of development, FAW-Volkswagen’s production capacity layout has covered Changchun in Northeast China, Chengdu in Southwest China, Foshan in South China, Qingdao in East China, and Tianjin in North China. It has the first car factory, the second car factory, the third car factory, and the third car factory. There are eight production plants including Plant 4, Car Plant 5, Car Plant 6, Powertrain Division and Stamping Center. From one brand and one product in the early days of the establishment of the factory, to now nearly 20 products from the three major brands of Audi, Volkswagen, and Jetta, FAW-Volkswagen has become a mature domestic manufacturer covering a full range of A, B, and C-class passenger models. production enterprise.

At present, before the relevant parties release precise information, let us first analyze and speculate, "Why does Audi Motors establish a new joint venture with FAW Group?"? Take a look at the new company established How possible and necessary.

▍Business needs

Overall, many traditional domestic car companies will spin off and operate their new energy vehicle business independently due to business needs, such as Changan New Energy, registered in 2008, GAC New Energy, Chery New Energy, BAIC New Energy, etc., which operated independently in 2017. Therefore, it is not ruled out that the Volkswagen Group will spin off the Audi brand new energy vehicle business separately in the Chinese market in the future.

In fact, Volkswagen had similar operations as early as 2017. The establishment of JAC Volkswagen was Volkswagen’s attempt to operate its new energy business independently in China.

From this perspective, it seems normal for the new energy segment of the Audi brand to establish a new joint venture with FAW Group due to business development needs.

However, this reason does not convince some professionals.

▍Chasing profits

Capital is profit-seeking, and both parties to the joint venture share this characteristic.

In the early 1995, after many rounds of discussions and difficult negotiations between FAW, Volkswagen and Audi, the three parties signed an agreement on the integration of Audi cars into FAW-Volkswagen in Beijing in November of that year. Production Contract.

Soon after, the three parties jointly revised the joint venture contract and determined the shareholding structure to be 60% for FAW, 30% for Volkswagen, and 10% for Audi. At the same time, FAW-Volkswagen and Audi signed a "Technology Transfer Agreement", and Audi series products will be officially included in FAW-Volkswagen's production as contract products.

Since then, the interest distribution between FAW Group and Volkswagen Group has been set at 60% to 40%.

However, with the rise of China's automobile industry, which has rapidly grown into the world's largest market in terms of production and sales, driven by interests, the Volkswagen Group has obviously had some illusions about its shareholding ratio in existing joint ventures. After all, in many other automobile joint ventures, both Chinese and foreign parties divide the shareholding ratio according to the "conventional" ratio of 50:50.

So for a long time, there have been reports in the industry that both parties planned to adjust the share ratio, but in the end there was no further finalization.

In November 2016, Audi took the risk of offending FAW Group and signed a cooperation framework agreement with SAIC Motor in Germany, planning to build another production base and channels in China. In 2018, Audi invested in SAIC-Volkswagen, holding a 1% stake. This symbolic shareholding meant that SAIC-Volkswagen could already produce products bearing the Audi trademark. Then the news that SAIC-Audi A7L was produced in China went viral.

In recent years, the sales volume of the Chinese automobile market has accounted for a large proportion of the Audi brand. In 2019, one-third of Audi's cars came from China, and more than half of the sales in the second quarter of this year came from China. As an important business unit for Audi's sales in China, FAW-Volkswagen Audi currently controls the sales and production of domestic models of all Audi models in China.

In view of this, we have reason to speculate that taking advantage of the opportunity of new energy vehicle cooperation, Audi pushed to establish a second joint venture with FAW. The original intention may be based on a long-term knot - shareholding ratio.

On the other hand, Volkswagen’s new MEB platform*** currently has three new factories, one in Germany and one in China. Among them, SAIC Volkswagen’s new energy factory is newly built and is scheduled to be officially put into production in October 2020; FAW -Volkswagen is renovated from the Foshan factory, and there is no information about production yet.

The Chinese automobile market at this stage is completely different from that of many years ago. The blowout period of the golden decade has passed. The trend of the new four modernizations of automobiles is surging. New forces in automobile manufacturing are conquering cities and territories, bringing changes to the entire automobile industry chain. There have been earth-shaking changes. The Chinese automobile market, especially the competitive landscape of the luxury car market, has also changed. Audi is also under great pressure. Further optimizing its cooperative relationship with FAW Group will help it further explore the Chinese market. , to achieve more business value.

Of course, the current analysis is limited to limited speculation, and the actual official information released by both parties of the joint venture company shall prevail.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.