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