China

VW to acquire 20% stake in Guoxuan to help sell EVs in China


HONG KONG/BEIJING — Volkswagen AG is set to take a 20% stake in Chinese electric vehicle battery maker Guoxuan High-tech Co Ltd, two sources told Reuters, as the German firm accelerates its electric push into the world’s largest auto market.

The deal would mark Volkswagen’s first direct ownership in a Chinese battery maker and comes as the Wolfsburg-based automaker strives to meet a goal of selling 1.5 million new energy vehicles (NEVs) a year in China by 2025, including plug-in hybrid cars.

The top foreign automaker in China plans to acquire the stake in Shenzhen-listed Guoxuan via a discounted private share placement in the coming weeks, the two sources with knowledge of the matter said. Based on Guoxuan’s market capitalisation of $2.8 billion (2.14 billion pounds), a 20% stake in the company at present is worth about $560 million.

The deal’s details have been mostly finalized and the two firms are waiting for new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, said one of the people, speaking on condition of anonymity.

After the stake purchase, Volkswagen will become the battery maker’s second-largest shareholder with a 20% stake, behind Zhuhai Guoxuan Trading Ltd, a firm controlled by Guoxuan’s founder Li Zhen, which currently holds 25%.

Shares in Guoxuan surged by their maximum 10% on the news on Friday to trade at their highest level since March last year.

Volkswagen declined to comment. Guoxuan and the China Securities Regulatory Commission did not immediately respond to requests for comment from Reuters.

An executive at Guoxuan’s board secretary’s office told the government-backed Securities Times newspaper it had not yet received news about a stake acquisition.

SECURING SUPPLIES

Guoxuan is among a swathe of mid-tier Chinese battery makers behind CATL and BYD. It is based in China’s eastern city of Hefei, where Volkswagen is also building electric vehicles with JAC Motor, one of a number of its Chinese joint venture partners.

A third source, who declined to be named due to the sensitivity of the matter, said Volkswagen has long wanted to control a battery maker to better manage its supply chain.

To achieve its NEV sales goal in China, Volkswagen has built a new $2.5 billion electric vehicle plant with partner SAIC Motor that will have annual output capacity of 300,000 cars and is also revamping manufacturing facilities in China’s southeastern city of Foshan to build electric cars with partner FAW Group.

Volkswagen has also identified CATL as a strategic supplier and Volkswagen board member Stefan Sommer told Reuters in July last year that it could even build its own battery cell manufacturing plants in China.

“By holding a stake in the top Chinese battery makers, carmakers can gain more bargaining power on battery prices,” said Yale Zhang, managing director of Shanghai-based consultancy AutoForesight. “Foreign carmakers are now catching up with their Chinese counterparts on securing battery supplies in China.”

Volkswagen’s rivals in China include Tesla, which earlier this month began delivering cars from its $2 billion factory in China. The U.S. electric car maker eventually plans to manufacture 250,000 vehicles a year in the plant’s first phase.

China has been a keen supporter of NEV — pure battery electric, hybrid and plug-in hybrids — and has started implementing NEV sales quota requirements for automakers.

However, cuts to subsidies have dealt the market a blow, with NEV sales contracting for the first time last year. Sales this year are likely to be flat or rise only slightly, according to China’s top auto industry association.

Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing; Additional reporting by Zhang Yan and Zhang Xiaochong in Beijing.

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China, mpv, volkswagen viloran

Volkswagen Viloran MPV is an ‘executive-level living room’ on wheels

China is catching up to the crossover follies swallowing most other markets, but minivans — or MPVs — remain quite popular, especially large luxury models. Volkswagen hasn’t had anything in that space to challenge stalwarts like the Buick GL8 and new entries like the Lexus LM, until now. The Viloran, a joint product with local partner SAIC, just debuted at Auto Guangzhou to correct the omission. The Viloran gives off Chrysler Pacifica vibes at first blush, but upon closer inspection looks like a stretched version of VW’s European Sharan MPV with the front fascia of a Touareg and a shapelier rear end. Unlike the flat-sided Sharan, designers added strong character lines along the flanks to add texture to the Viloran’s length; at about 209 inches long, the MPV is 18 inches longer than the Sharan or 5 inches longer than the Pacifica.

VW says the stretch job and amenities create an “executive-level living room” inside, a huge perk in a country where the chauffeured class is so wide-ranging that even the Mercedes-Benz A-Class gets a long-wheelbase version. Accessing the Viloran’s cabin through sliding doors on both sides reveals a 2-2-3 seating format, with second-row reclining captains’ chairs boasting electrically-operated footrests. There’s also a panoramic roof, adaptive cruise control, traffic jam assistant, cameras surrounding the vehicle, and a “Royal Hall-level Dynaudio” stereo system.

Built on the MQB platform, the engine is believed to be a 2.0-liter EA888 turbocharged four-cylinder with 217 horsepower and  258 pound-feet of torque, shifting through a seven-speed DSG transmission. Only the front wheels are driven for now. It’s not clear yet if all-wheel drive will be offered, nor if the Viloran will be exported to other markets.

The MPV is another front in VW’s continuing push to increase share in China. The German automaker said it will sell more than three million cars in China this year for the third consecutive year, as it has increased its market share almost a full percentage point. The aim being ‘to become the preferred brand of consumers in all relevant market segments in China,’ VW has launched five new models there this year and has another five new models planned for 2020. As part of that effort, VW and local partner FAW are expected to release a crossover version of the Viloran.

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China, crossover, electric vehicle, suv

Chevy teases three-row Chinese Blazer ahead of Friday reveal


Chevrolet has released a teaser image of the seven-seat, three-row Blazer it plans to sell in China ahead of its official reveal Friday at the Chevrolet Gala Night in the city of Hefei. That’s also where the brand plans to debut its first electric vehicle for the Chinese market, the called the Menlo.

First the Blazer XL, as it will reportedly be named. The darkened image gives us our best look yet at the three-row SUV after a series of spy shots of the vehicle wearing camouflage. It gives a good sense of the added length and the up-sweeping shoulder and belt line in the rear. What’s less clear from this teaser and previous spy shots is how the door creasing compares with the five-seat U.S. version.

Chevy previewed the three-row Blazer with the FNR-CarryAll concept shown at an auto show in China last year.

The Menlo, meanwhile, is based on the Chevy FNR-X concept that was shown in Shanghai in 2017. Like that “all-purpose sports concept,” and despite its description as a sedan, the Menlo appears to be more of a plug-in electric crossover, as evidenced by a teaser image of what is clearly a rear hatch and images that leaked this summer on CarNewChina’s Facebook page. It reflects design influences from the Chevy Volt plug-in hybrid — which preceded it in China in 2011 — the Blazer and the Chevy Bolt EV.

CNET reports that the Menlo is built on the China-only Buick Velite 6 platform and makes 176 horsepower. Chevy’s China PR unit describes the Menlo as a “sporty-looking sedan that leverages GM’s highly efficient and reliable electric propulsion and intelligent connectivity technology,” so we’ll look forward to learning more later this week.

Chevy of course already sells a three-row SUV in the U.S. in the Traverse. But as we’ve previously pointed out, that’s technically bigger than the Blazer XL, and the latter is undoubtedly a more stylish vehicle that might appeal to U.S. buyers. Not to mention, it’s a sport utility vehicle. Do automakers really care anymore whether they have too many of them?

In China, anyway, the Blazer XL will be available in two trim levels, RS or Redline. It joins the compact Trailblazer, midsize Equinox and Tracker small SUV as the flagship in the brand’s lineup of utility vehicles in its second-largest market.

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