Volkswagen extends China JV by 25 years to tighten market grip

Volkswagen extended its joint venture with China FAW Group Corp by 25 years, as the German manufacturer steps up its bid for the global autos throne by targeting an increasing share of the world's biggest car market.

European and US carmakers are keen to raise their presence in China, but have been confined to owning 50 percent or less of joint venture companies run together with Chinese enterprises.

Although Chinese demand is slowing somewhat, car sales in the world's No.2 economy have still been up over 10 percent this year, helping global players such as VW cope with a fragile recovery in its European home market after a six-year slump.

VW, one of the first global automakers to establish production facilities in China in the 1980s, has the biggest manufacturing output and has been working with FAW for over two decades.

By extending the joint venture from 2016 to 2041, VW and FAW will expand their R&D activities and step up work on fuel-saving technology, VW said.

Wolfsburg-based VW sold almost 3.3 million cars in China in 2013, about a third of its record global deliveries of 9.73 million.

Nine-month group deliveries in China, including the Audi luxury brand, jumped 15 percent to 2.72 million autos, VW said on Friday in a separate statement.