The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Volkswagen AG struck deals with two Chinese companies and deepened cooperation with Ford Motor Co., broadening its strategic footprint as the coronavirus sparks the worst economic contraction in decades and internal tensions rise.
The German manufacturer will become the biggest shareholder of battery company Guoxuan High-Tech Co. and closed in on a 50% stake in a Chinese electric-vehicle partner. At a meeting to discuss China expansion and other issues, Volkswagen’s supervisory board approved plans to widen cooperation with Ford to electric and self-driving cars after an initial deal to team up on light commercial vehicles.
VW is doubling down in China as its car market is showing signs of revival from a slump exacerbated by the coronavirus outbreak, while vehicle demand in Europe and the U.S. continues to languish. Combinations help automakers pool resources as a seismic industry shift toward electrification and self-driving vehicles requires massive investments.
While VW is expanding abroad, there’s trouble brewing at home. German labor leaders attacked management over software issues that affected the rollout of the ID.3 electric car and the flagship Golf hatchback, while the company came under fire for a recent PR gaffe triggered by a racially insensitive advertising video.
The concern is that those missteps will intensify the impact of the virus crisis, rankling the troops who fear steep job cuts, according to an open letter by officials representing labor union IG Metall.
The pandemic has hit the auto industry hard, disrupting production and crippling demand at a time when companies are faced with huge investment requirements. While demand is gradually recovering in China, the world’s largest car market, a global rebound remains far from certain.
The scale of the challenges was evident in Nissan Motor Co.’s earnings. The Japanese carmaker on Thursday posted its biggest loss in two decades and unveiled a turnaround plan involving cost cuts, capacity contraction and a reduction in its number of car models. Renault SA on Friday said it will eliminate about 14,600 jobs worldwide.