Volkswagen, To Produce Electric Cars in China

World News Nilgun Salim
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The German carmaker signed a preliminary agreement with Chinese  company Anhui Jianghuai  regarding the possibility to manufacture electric vehicles through a new joint venture, according to Fortune. The companies might close a formal agreement within five months.

Last year, China became the largest producer of electronic cars in the world, surpassing U.S. Their success was achieved after the Chinese government decided to promote the transition from gasoline engines to electric motors in order to reduce the pollution level in their country. After the public campaign initiated by the Government, the sales of electric cars increased four times only in the last year.

Currently, JAC occupies the ninth position in the Chinese car manufacturing market, while Volkswagen competes with the American producer GM. The Chinese car market is the largest in the world. Volkswagen obtained some pretty profitable deals with SAIC Motor and China FAW Group.

In China, the German producer is the most appreciated carmaker. According to the Chinese press, this year, VW plans to invest $4,5 million in their Chinese subsidiary, in order to launch new hybrid models.

Meanwhile, Daimler is also considering to sell electric vehicles in China, announced Mercedes-Benz’s Hubertus Troska on Wednesday.

Last year, China sold more than 300,000 electric vehicles. Most electric cars have prices below 25,000 yuan (27,995 pounds).

The production and sale of electric vehicles in China will double this year, announced the Minister of Industry and Information Technology Miao Wei.

China requires foreign producers to establish joint ventures with the local partners in order to ensure that Chinese car manufacturers obtain the access to technology and to ‘know-how’.