Chinese piracy is nothing new. Chinese piracy of entire car engines is, however.In what’s turning into a warning for all car companies hoping to capitalise on the Chinese market, China’s First Automotive Works (FAW) is allegedly copying Volkswagen’s Golf and Polo model transmissions, then putting them into their own cars, reports German newspaper Handelsblatt.
To manufacture cars in China, foreign car makers must join in partnerships with one of China’s domestic, state-run car companies. While opening the door for opportunities at piracy, many foreign car companies see it as a necessary risk, given the huge opportunity in sales China presents. In April, VW took this risk when it extended its joint venture contract with FAW, Chinese Prime Minister Wen Jiabao and German Chancellor Angela Merkel there to witness the occasion.
But is the risk worth the reward? For VW, it appears so. Last year, VW sold 2.26 million cars in China, 27% of total sales for the German car maker. In the first half of this year, the number grew 17% to 1.3 million.
Given this fact, VW doesn’t really want to burn any bridges. In addition, even if the allegations are true, they can’t legally do much until FAW comes out with its Besturn B50 in 2013, FAW’s small car model believed to be the model in question.
FAW seems to recognise their chance, too. According to engineering firms whom work with VW, FAW has built a manufacturing factory in Changchun where it plans to start churning out the Bestrun B50.
In the end, maybe it’s all just an attempt at payback. In April, when Merkel and the Chinese PM were in attendance for the official hand shake between VW’s CEO Martin Winterkorn and Chinese partner Xu Jianyi, the back drop mistakenly said Volkswagen/SAI. A bit ironic, and embarrassing, given SAI is regarded as the largest rival to FAW.
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