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Volkwagen to take over former Fiat plant in China

Volkswagen's China operation has signed an agreement to buy a plant formerly run by a joint venture of Italy's Fiat in the country's east, the German auto giant's local partner said Wednesday.

Published: 9 April 2008 15:54 CEST

Volkwagen to take over former Fiat plant in China

A file photo of workers at the Shanghai VW plant. Photo: DPA

“After completing the (asset) appraisal of Nanjing Fiat, Shanghai Volkswagen has signed an asset take-over agreement and will formally set up its Nanjing production base in the near term,” said a statement by SAIC Motor.

It did not disclose any financial details about the deal.

But the 21st Century Business Herald newspaper reported Wednesday that the take-over price would reach around 1.5 billion yuan (€136 million).

Nanjing Fiat was a joint venture between Fiat and China’s Nanjing Auto. The two companies terminated cooperation after SAIC bought Nanjing Auto in the biggest-ever tie-up between Chinese vehicle makers in December 2007.

“The utilisation of Nanjing Fiat’s capacity has long been insufficient while Shanghai Volkswagen has been facing capacity bottlenecks due to booming sales and the lack of a new production base,” the statement said.

Shanghai Volkswagen, a 50-50 joint venture between SAIC and Volkswagen, expects the new base to start production in the middle of this year, with output to reach 60,000 units this year and 100,000 in 2010, it added.

China derides Copenhagen democracy meet as 'political farce'

Demonstrators gathered outside the Copenhagen Democracy Summit on Tuesday. Photo: Emil Helms/Ritzau Scanpix

The Copenhagen Democracy Summit was held Monday and Tuesday in the Danish capital and organised by the Alliance of Democracies, an organisation targeted by Beijing sanctions in March and founded by former NATO boss Anders Fogh Rasmussen.

In addition to Taiwan’s President Tsai Ing-wen and Hong Kong democracy activist Nathan Law, Danish Foreign Minister Jeppe Kofod also participated in the forum by video link, which Beijing said violated “the one-China principle.”

“This summit is a political farce,” the Chinese embassy in Denmark wrote in a statement published on Tuesday. “Inviting those who advocate Taiwan and Hong Kong ‘independence’ to the meeting violates the one-China principle and interferes in China’s internal affairs,” it said.

“Some hypocritical western politicians are good at meddling in other countries’ internal affairs and creating divisions and confrontation in the name of ‘democracy’ and ‘freedom’. They are bound to fail,” it added.

At the conference on Monday, Kofod said it was “deplorable” that Beijing had imposed sanctions on 10 European individuals and organisations in response to EU sanctions on Xinjiang officials over their actions against the Uyghur Muslim minority.

Like most countries, Denmark applies the one-China principle — under which Beijing bars other countries from having simultaneous diplomatic relations with Taipei — though it does maintain relations with Taiwan.

Cut off politically from the rest of China since the end of the Chinese Civil War in 1949, the territory is self-governing but is not recognised by
the United Nations.

Beijing considers Taiwan a rebel province that will one day return under its control, by force if necessary.

China’s sabre-rattling has increased considerably over the past year, with fighter jets and nuclear-capable bombers breaching Taiwan’s air defence zone on a near-daily basis.

“Our government is fully aware of the threats to regional security, and is actively enhancing our national defence capabilities to protect our
democracy,” Tsai told the conference in a video address on Monday. US President Joe Biden is expected to present his China strategy soon, as
calls mount for him to publicly commit to defending Taiwan militarily in the event of a Chinese attack.

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