German Paper: "China Steals Volkswagen Patents"

Bertel Schmitt
by Bertel Schmitt

A few months ago, Volkswagen extended its joint venture contract with Chinese partner FAW for another 25 years, with appropriate pomp and circumstance: Chinese Prime Minister Wen Jiabao and German Chancellor Angela Merkel witnessed the signature. Now, Volkswagen takes the unusual step of going semi-public with the theft of intellectual property. According to reports in German media, FAW has “systematically and repeatedly” stolen designs of important components such as engines and transmissions. Volkswagen’s hands are tied.

Volkswagen managers caught partner FAW stealing designs for the Volkswagen transmission MQ 200, writes Germany’s Handelsblatt in a long article which names several (albeit anonymous) Volkswagen managers as sources. “It’s a catastrophe,” a VW exec told the paper.

According to the report, this is not the first case or purloined patents. Two years ago, Volkswagen blueprints were used to copy the EA 111 engine. Volkswagen’s Winterkorn complained to FAW boss Xu Jianyi. Xu apologized, said it was an oversight by an overeager engineer who had been “severely criticized.”

“In the meantime, FAW built a factory in Changchun for the copied engine,” says the report.

Volkswagen had shared construction details with its joint venture FAW-Volkswagen, which builds the engine under license. It did not share the plans with FAW. “The plans should not have gotten to the outside,” a Volkswagen manager told the paper. ”This is no way to cooperate, trust is being violated.”

It is doubtful that Volkswagen will openly fight against the copy. Bigger things are at stake. China already is Volkswagen’s most important market. For 2018, Volkswagen has budgeted four million units for China. Even if Volkswagen would want to take action against the copy, their “hands are tied” until 2013, said a VW executive. That’s when the purloined powertrain will hit the market.

Well, maybe it was a Chinese revenge anyway. The official PR picture with Winterkorn shaking Xu’s hand after the signing of the contract has “Volkswagen/ SAIC” as the backdrop. VW’s other Chinese joint venture partner SAIC is regarded as a bitter rival by FAW, and the improper backdrop is a major loss of the all-important face.

Tip of the hat to the man in the mountains. Demand denied

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Kita Ikki Kita Ikki on Jul 27, 2012

    One small edit: "VW’s other Chinese joint venture partner SAIC is regarded as a bitter rival by FAW, and the improper backdrop is a major loss of the all-important face."

  • Icemilkcoffee Icemilkcoffee on Jul 27, 2012

    Hahaha- stealing patents from VW! Now that is a dumb move. They better steal the patents for the 'special tools' too, cuz you can't fix these POS VW products without those very special special tools.

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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