According to a comprehensive foreign news report, Volkswagen executives said recently that the company is considering raising the share ratio of FAW-Volkswagen in the joint venture, and is not prepared to buy Fiat or Pekka as recently.
Re-introduction of FAW-Volkswagen last week, Volkswagen held its mid-year performance conference, during which Volkswagen Chief Financial Officer (CFO) Hans Dieter Poetsch said that he is discussing with China FAW Group to extend the term of the joint venture agreement. This may include raising the share ratio of the public in the FAW-Volkswagen."
FAW-Volkswagen was established in 1991; by 1995, Audi was included in FAW-Volkswagen's production contract, and FAW-Volkswagen's share ratio structure was changed to 60% for FAW, 30% for Volkswagen, and 10% for Audi. In contrast, Volkswagen's shareholding structure in Shanghai Volkswagen, and SAIC Group's equal shareholding, each accounting for 50%.
In fact, Volkswagen has always wanted to increase its holding of FAW-Volkswagen. Last September, Volkswagen Group CEO Martin Winterkorn said: "Volkswagen and FAW hope to expand their partnership. We are currently considering multiple possibilities - how to expand our cooperation. One possibility would be to increase our shareholding ratio in the joint venture company FAW-Volkswagen from 40% to 50%. We are negotiating this matter."
At present, Volkswagen does not include the profits obtained in the business in China into the global business, but divides it by the equity method. According to Audi's financial statements, in 2013, Audi received a dividend of 382 million euros from FAW-Volkswagen with a 10% share. The foreign media calculated that FAW-Volkswagen's overall profit was 3.82 billion euros.
In the first half of this year, Volkswagen Group obtained operating profit of 2.622 billion euros from the Chinese market, equivalent to RMB 21.7 billion; last year was 2.37 billion euros. In the first half of this year, profits in China increased by 10.6% year-on-year. This part of the profit is compared with the Volkswagen Group's global profit in the first half of 6.186 billion euros, the proportion reached 42.4%. In other words, in addition to the global profits in the statements, Volkswagen earned 40% of the global profits from China.

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