SHANGHAI--A Chinese government probe into current and former
executives at a Volkswagen AG joint venture isn't tied to an
antitrust investigation into foreign auto makers, according to the
auto maker and its local partner.
The probe comes as foreign car makers are under the spotlight
for the prices they charge Chinese consumers for spare parts and
services. Still, Volkswagen's Chinese partner,
government-controlled FAW Group Corp., said the two executives were
put under investigation following China's latest round of routine
inspections of official conduct at state-run companies, and not as
part of the antitrust probe.
"There is no need to speculate too much about the connection,"
said an FAW spokeswoman, who added that the company is
cooperating.
Representatives for Volkswagen and its joint venture with FAW,
FAW-Volkswagen Automobile Co., said the two inquiries weren't
related. They didn't release additional details.
The Communist Party's Central Commission for Discipline
Inspection said Tuesday it has launched a probe into Li Wu, a
former deputy general manager at FAW-Volkswagen, and Zhou Chun, a
deputy general manager of the joint venture's Audi sales division.
The regulator cited "suspected serious violations of discipline and
law," phrasing Chinese authorities typically use in reference to
corruption allegations.
The two couldn't be reached for comment, and it wasn't clear
whether they had lawyers.
"Li Wu had left the company in 2006, while the antitrust
campaign only came to a peak in recent months," said Li Pengcheng,
a spokesman for FAW-Volkswagen, who isn't related to Mr. Li. He
said the company couldn't comment further on the investigation.
Volkswagen's Audi arm is one of several foreign auto makers
under scrutiny for the way they sell spare parts and services in
China, the world's largest car market. Chinese antitrust officials
have said they found evidence of price manipulation by Audi,
Daimler AG's Mercedes-Benz and Fiat SpA's Chrysler for spare parts
and aftermarket services. The companies have said they are
cooperating.
FAW-Volkswagen, established in 1991, makes VW and Audi cars in
China, where foreign auto makers are required to team up with local
partners to build cars domestically.
Chinese officials often train their sights on state-owned
companies as they look for potential corruption, a process that had
increased in intensity amid an antigraft effort launched two years
ago by Chinese President Xi Jinping.
FAW and its joint venture with VW has come under scrutiny
before. In June 2012, China's top auditor, the National Audit
Office, said that it found malpractice by FAW and FAW-Volkswagen,
including failure to record sales of about 170 new cars. A few days
after the audit report was issued, local anticorruption officials
launched an investigation into Jing Guosong, then deputy general
manager of FAW-Volkswagen's sales division, said the joint venture
at that time. FAW and the joint venture on Wednesday declined to
comment on Mr. Jing.
Established in 1953, FAW, previously known as First Automotive
Works, was China's first post-revolution auto maker. Former
President Jiang Zemin worked there from 1956 to 1962, according to
official information, and he visited FAW's operations on at least
three occasions after he became the Communist party's boss in 1989,
according to the company's website.
Rose Yu