What does it mean that Volkswagen is divided into FAW and SAIC?

[KinsleyMarie]

The predecessor of FAW Group was the First Automobile Works of China, established in 1953, which can be said to be the earliest automobile manufacturing company in China; while SAIC Group's history can be traced back to 1900, at that time SAIC was just a machine repair factory, and it was not until 1955 that the Shanghai Automobile Manufacturing Factory was truly established. The following are the differences between the two: 1. Different establishment times: Shanghai Volkswagen was established in 1985, while FAW-Volkswagen was established in 1991. 2. Different investment ratios: Shanghai Volkswagen is a 50-50 joint venture, while FAW-Volkswagen is 60% owned by FAW Group. 3. Different production models: The most obvious difference is that in addition to producing Volkswagen brand cars, FAW-Volkswagen also produces Audi brand cars due to its cooperation with Audi, while Shanghai Volkswagen produces Skoda brand cars. 4. The Volkswagen brand car models produced are also different: for example, Shanghai Volkswagen produces Passat, while FAW-Volkswagen produces Magotan; Shanghai Volkswagen produces Santana, while FAW-Volkswagen produces Jetta, and so on.

[DelKylie]

I'm quite familiar with automotive history. The division of Volkswagen into FAW-Volkswagen and SAIC Volkswagen traces back to China's reform and opening-up. Back then, Volkswagen, as a global automaker, wanted to enter the Chinese market, but policies required joint ventures with Chinese companies. In 1984, SAIC Group partnered to establish SAIC Volkswagen, producing the Santana primarily for the East China market. In 1991, FAW-Volkswagen was founded in Changchun, targeting northern markets with the classic Jetta model. The dual-venture strategy was mainly due to China's vast market size, which a single company couldn't cover. The joint venture model allowed Volkswagen to introduce technology while Chinese partners handled localized production and sales networks. This avoided internal conflicts, enhanced competitiveness, and gave consumers diversified choices. Today, their model lineups differ: SAIC offers the Lavida and Tiguan, while FAW produces the Magotan and Bora, with comparable quality but more localized designs.

[DelJourney]

When I was researching car purchases, I happened to look into FAW-Volkswagen and SAIC-Volkswagen, which to me are Volkswagen's two joint venture partners in China. This means Volkswagen has established joint ventures with two Chinese companies, forming FAW-Volkswagen and SAIC-Volkswagen respectively. One is based in Changchun, and the other in Shanghai, covering different geographical regions. FAW's models like the Magotan and Jetta lean towards a practical northern style, while SAIC's models like the Lavida and Passat are more fashionable, catering to the demands of eastern China. When choosing a car, I need to see if the model fits my needs—for example, the Lavida for commuting or the Tiguan for more space. Both brands carry the Volkswagen heritage, with interchangeable parts but different configurations, and similar maintenance costs. Having two joint ventures fosters market competition, leading to faster model updates and more affordable prices. I recommend test-driving multiple models to compare the actual experience.

[GabriellaLee]

Having been in this industry for decades, it's common practice for Volkswagen to operate through FAW and SAIC. FAW-Volkswagen represents the joint venture between Volkswagen and First Automobile Works, located in Jilin, primarily producing models like Jetta and Golf. SAIC Volkswagen is the collaboration between Volkswagen and SAIC Group, based in Shanghai, manufacturing the Santana and POLO series. Technically, they share core engines and platforms, but exterior adjustments cater more to Chinese preferences. For example, the Lavida is a localized design by SAIC, suited for urban use. Maintenance-wise, parts are largely interchangeable, making upkeep convenient and cost-effective. Operating through two entities allows models to better meet regional demands, enhancing durability.

[StSamuel]

Having worked in automotive industry analysis for years, I believe Volkswagen's strategy of partnering with both FAW and SAIC is a smart market approach. The purpose is to tap into China's vast market: FAW is rooted in the north, while SAIC covers the coastal developed regions, creating geographical complementarity. The joint ventures enable Volkswagen's technology to be localized quickly, with Chinese partners providing production bases and distribution networks that boost employment. Splitting into two partners avoids monopoly and fosters internal competition: FAW focuses on premium models like Audi, while SAIC emphasizes family SUVs such as the Tiguan. This structure allows flexible adaptation to market changes, with faster new model launches benefiting consumers through more choices. From a corporate perspective, it enhances brand penetration, keeping Volkswagen's sales leadership in China.