BEIJING (Reuters) - Volkswagen (VOWG_p.DE) trumpeted a bright start to 2018 at the Beijing auto show on Tuesday and outlined spending plans for electric vehicle and autonomous driving ventures in China.
The German group, undergoing far-reaching reform as it emerges from the 2015 emissions cheating scandal that resulted in billions of euros in fines, is on track for profitable growth this year, new CEO Herbert Diess said at the show.
“We had a very positive start into 2018. We see positive momentum in all regions,” Diess said, referring to group-wide deliveries that increased by 7.4 percent in the first quarter to 2.7 million vehicles.
“We see good opportunities for profitable growth in 2018, too, but we need to speed up (reform of the company),” he added, noting rapid changes across the industry and heightened competition, especially in China.
Operating profit at Europe’s largest automotive group is expected to have risen by 2.3 percent in the first three months of the year to 4.47 billion euros ($5.45 billion) and is seen expanding by 7.3 percent this year to 18.3 billion euros, a Reuters poll of analysts and brokerages showed ahead of its quarterly results on Thursday.
Separately, Jochem Heizmann, head of VW’s China business, said that VW and its three Chinese joint ventures plan to spend 15 billion euros through 2022 on electric cars (EVs) and new technologies such as self-driving vehicles and alternative mobility services.
That compares with plans announced by VW last November to invest 10 billion euros alone in all-electric and semi-electric cars in China by 2025.
Together with JV partner Anhui Jianghuai Automobile (JAC) (600418.SS), VW plans to launch an electric sport-utility vehicle under a new brand called “Sol” with a range of more than 300km, Heizmann said.
The group, which has a goal to deliver 1.5 million electric vehicles (EVs) in China by 2025, plans to start building EVs in at least six Chinese factories by 2021, Diess said.
The CEO said VW has no plans to alter the JV structure of its Chinese operations even though Chinese authorities are planning to open up the world’s largest auto market by removing caps on foreign ownership.
German-Chinese automotive tie-ups are also extending to batteries for electric cars.
Battery maker Tianjin Lishen plans to open a sales office in Germany, its first in Europe, and is in talks to supply local manufacturers of electric vehicles, a source at the company has told Reuters.
Two sources said that VW and Daimler (DAIGn.DE) are negotiating with the unlisted Chinese company.
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Reporting by Ilona Wissenbach; Writing by Andreas Cremer; Editing by David Goodman