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Volkswagen AG Expects Sales to Rise This Year

| Feb 21, 2016 11:29 PM EST

Volkswagen currently has two partnerships with Chinese auto companies.

Volkswagen AG believes that its sales in China could rise in line with the country's auto market this year, as it considers a partnership with JAC Motors, which would be its third partnership with Chinese automakers, as reported by the Global Times.

Jochem Heizmann, the head of VW's China business, told reporters in Beijing that he is expecting China's total passenger car market to grow according to GDP growth, possibly even exceeding it.

"If we look to the general growth situation, it's still tremendous, big growth," said Heizmann. He added that there is potential for expansion in the lower-tier cities of the country despite its economy listing its weakest growth in the last quarter of the century.

"These are still cities with millions of inhabitants but in a different development stage," said Heizmann. He also said that VW will stick to existing plans for investment in China, including investing over 4 billion euros ($4.46 billion) every year for the coming years.

VW has been the subject of criticism in the last few months after admitting in Sept. 2015 that it misrepresented the emissions of its vehicles to U.S. regulators.

China's sales of VW cars dropped 3.4 percent in 2015 before bouncing back in January. Prior to this, China had been a stable source for revenue for the German automaker.

General Motors Co., the U.S. rival of VW, saw its sales in China go up 5.2 percent in 2015. This overtook VW's top spot in what is currently the largest car market in the world.

While VW is already involved in two tie-ups, both with Chinese automakers, Heizmann said that VW is exploring a potential for cooperation with JAC Motors.

"We have started talking about potential for cooperation, but there are no more detailed plans at present," said Heizmann in response to questions regarding whether the cooperation with JAC Motors could involve electric vehicles, which the Chinese government is currently promoting to address the chronic pollution in large cities.

JAC Motors, one of China's smaller automakers, is based in Hefei City, Anhui Province.

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