VW says profit from China ventures dipped in 2016
Volkswagen Group said profits attributable to its two joint ventures in China fell in 2016 "as expected," as demand softened for the German auto giant's Audi luxury brand.
VW does not consolidate its China earnings into its financial results. Instead, it uses the equity method to account for China profits.
Globally, VW reported net profits last year of 5.14 billion euros (37.42 billion yuan) -- a turnaround from 2015, when it lost 1.58 billion euros.
In China, VW has a 50-50 joint venture with SAIC Motor Corp., which produces VW and Skoda vehicles. It also has a 40-60 partnership with China FAW Group Corp., which builds VW and Audi vehicles.
In 2016, VW Group's China deliveries rose 12 percent to 3.98 million vehicles. But most of that sales growth was generated by low-priced compact sedans such as the VW Lavida, Jetta, Sagitar and Santana.
By contrast, Audi sales rose only 3.6 percent last year to 591,554 vehicles, as rivals Mercedes-Benz and BMW gained market share.
To improve profitability and boost sales, the company plans to roll out a slew of crossovers and SUVs over the next few years. The VW brand alone plans to launch 10 new or redesigned crossovers in China by 2020.
Globally, VW reported net profits last year of 5.14 billion euros (37.42 billion yuan) -- a turnaround from 2015, when it lost 1.58 billion euros.
In China, VW has a 50-50 joint venture with SAIC Motor Corp., which produces VW and Skoda vehicles. It also has a 40-60 partnership with China FAW Group Corp., which builds VW and Audi vehicles.
In 2016, VW Group's China deliveries rose 12 percent to 3.98 million vehicles. But most of that sales growth was generated by low-priced compact sedans such as the VW Lavida, Jetta, Sagitar and Santana.
By contrast, Audi sales rose only 3.6 percent last year to 591,554 vehicles, as rivals Mercedes-Benz and BMW gained market share.
To improve profitability and boost sales, the company plans to roll out a slew of crossovers and SUVs over the next few years. The VW brand alone plans to launch 10 new or redesigned crossovers in China by 2020.
