VOLKSWAGEN (VW) extended its joint venture with China FAW Group Corp. by 25 years, as the German manufacturer steps up its bid for the global autos throne by targeting an increasing share of the world’s biggest car market.

    European and U.S. carmakers are keen to raise their presence in China, but have been confined to owning 50 percent or less of joint venture companies run together with Chinese enterprises.

    VW, one of the first global automakers to establish production facilities in China during the 1980s, has the biggest manufacturing output and has been working with FAW for over two decades.

    By extending the joint venture from 2016 to 2041, VW and FAW will expand their R&D activities and step up work on fuel-saving technology, VW said.

    “Enhancing ties with its Chinese partners is a must for VW, which is overly dependent on the market,” Frankfurt-based Bankhaus Metzler analyst Juergen Pieper said.

    Wolfsburg-based VW, which also has a joint venture with China’s SAIC Motor Corp. Ltd., last year sold almost 3.3 million cars in China, its biggest market, about a third of its record global deliveries of 9.73 million.

    Nine-month group deliveries in China, including the Audi luxury brand and sports-car maker Porsche, jumped 15 percent to 2.72 million units, VW said Friday in a separate statement.

    The contract extension with FAW was signed Friday on the occasion of talks between German Chancellor Angela Merkel and Chinese Premier Li Keqiang in Berlin.

    The length of the extension appears customary. VW’s second joint venture with SAIC was extended in 2002 by 28 years until 2030. BMW in June extended its partnership with Brilliance China Automotive Holdings until 2028.

    Europe’s largest carmaker said in July it would invest 2 billion euros (US$2.53 billion) with FAW to build two more assembly plants. The German group currently operates eight car-making factories and nine component plants in China.

    (SD-Agencies)