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VW and partner SAIC start building $2.5B Audi plant in China

BEIJING — Volkswagen AG's China joint venture with SAIC Motor Corp has started building a $2.5 billion new energy vehicle (NEV) plant in Shanghai, which will make VW's luxury Audi brand cars, a possible first for the venture. The new plant is a key step for Audi to diversify production of its cars in the world's largest car market from its long-standing local partner, China FAW Group Corp. This shift has been delayed amid resistance from local dealers. SAIC Volkswagen said the new plant would have an annual capacity to make 300,000 cars and begin production from 2020. Audi sold 481,387 vehicles in China from January to September this year. The announcement comes the same week Tesla secured a Shanghai location for a Gigafactory battery plant to serve the Chinese market. Audi unveiled the plan to bolster ties with SAIC in late 2016. Earlier this year, the Germany luxury carmaker bought a 1 percent stake in the SAIC Volkswagen venture, paving the way for the joint venture to produce and sell Audi cars. Volkswagen currently gets a larger proportion of the proceeds from the 50-50 tie-up with SAIC than from its 40 percent stake in the venture with FAW. SAIC Volkswagen said in a statement on Friday the plant would cost 17 billion yuan ($2.5 billion) and would make VW and Skoda models as well as Audi cars. It will help VW tap China's fast-growing market for NEVs, a category comprising electric battery cars and plug-in electric hybrid vehicles. ($1 = 6.9314 Chinese yuan renminbi) Reporting by Yilei Sun and Adam JourdanRelated Video: Image Credit: Reuters Green Plants/Manufacturing Audi Volkswagen Skoda Electric Hybrid

Recharge Wrap-up: Smart Fortwo engine fires, Tesla finalist for Extole Advocacy and Customer Experience award

NHTSA has launched a preliminary investigation into complaints of Smart Fortwo engine fires. So far, the agency has received eight complaints about the rear engine compartment catching fire in model year 2008 and 2009 Fortwos and quickly engulfing the car. Six of the fires occurred while driving and were preceded by a check engine light. "The safety of our customers is our primary concern, and we are cooperating with NHTSA in its inquiry," says parent company Mercedes-Benz. "We are not aware of any injuries related to this inquiry." Read more from Automotive News. Volkswagen will pay $1.6 billion (US) in Canada as part of a settlement of its diesel emissions scandal. The funds will be used to fix or buy back some 105,000 affected cars, compensate owners between $3,815 and $4,451 above the buyback price, and pay a $11.2 million civil fine. So far, VW has agreed to spend over $18 billion in North America in connection with its diesel emissions cheating, and is expected to settle on a resolution of its 3.0-liter diesel vehicles in the US soon. Read more at Hybrid Cars, or from Automotive News. Tesla is one of three finalists for the Extole Advocacy and Customer Experience Award. The award recognizes companies that turn customers into brand advocates through referral programs. In Tesla's current program, customers who buy a car using a referral link get $1,000 off the price of their car, while referring owners are awarded prizes including a signed Powerwall 2 and invitations to unveiling events. Referring owners are also entered into a drawing to win a Model S or Model X. "With a disdain for paid advertising, Tesla Motors is leading the trend of reaching new customers through existing ones," says Extole. The other finalists are Hanna Andersson and Ulta Beauty. Read more at Teslarati. Related Gallery Review: 2009 Smart ForTwo View 20 Photos News Source: Automotive News, Hybrid Cars, Automotive News, TeslaratiImage Credit: Copyright 2016 Sebastian Blanco / AOL Government/Legal Green smart Tesla Volkswagen Green Automakers Safety Diesel Vehicles Electric recharge wrapup

VW budget sub-brand stuck in limbo over VW standards, costs

Reports in October 2012 claimed Volkswagen had begun investigating the creation of its own budget brand. This came after having failed to purchase Malaysian car company Proton or produce a meaningful partnership with Suzuki, and after watching Renault-Nissan make piles of euro on Dacia and plot the return of Datsun.
For VW, more important than the question of what to call it was how to build it profitably and in a way that didn't damage the VW brand. According to a report in Autocar, a satisfactory answer still hasn't been found. The hurdle is how to hit "'necessary' quality and safety levels" at the price points needed to make the venture worthwhile. At the time of the 2012 report, German outlet Der Spiegel said VW was trying to get prices down to 6,000 to 8,000 euro ($7,784 to $10,379 US), about two thousand to four thousand euro under the price of the VW Up and in line with the cost of a 6,790-euro Dacia Sandero in Germany.
In March 2013, VW announced, "We want to bring a true budget car to the market in China in the foreseeable future," the most concrete move in that direction after years of planning to make a decision. Working with local Chinese maker FAW, it was predicted that the vehicle in question would appear around 2016, but as of November last year a final vote on it needed to wait until this year because "We are still working on the cost side" and profit possibilities for a car that "has to be durable, it has to be precise, it has to be safe."