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Volkswagen to set up shop in China
Ingolstadt, May 03: Volkswagen AG has plans of setting up a new automotive plant in China to help it reach an annual production capacity of 1.6 million vehicles by 2008, the Europe`s carmaker said on Sunday.
Ingolstadt, May 03: Volkswagen AG has plans of setting up a new automotive plant in China to help it reach an annual production capacity of 1.6 million vehicles by 2008, the Europe's carmaker said on Sunday.
VW Chief Executive Bernd Pischetsrieder and management board member Folker Weissgerber signed a corresponding letter of intent on Sunday together, with one of its two Chinese partners, Shanghai Automotive Industry Corporation.
Volkswagen, which increased deliveries in 2003 by 36 per cent to some 698,000 cars in China, also builds cars for the local market with its other joint venture partner, First Automobile Works.
"This year we're aiming to produce and sell more than 800,000 vehicles in China," Pischetsrieder said. "We will double this volume by 2008."
The agreement was signed during an official visit by Chinese Prime Minister Wen Jiabao to VW's luxury unit Audi in Ingolstadt.
Following a review of its operating efficiency and utilization, the group also plans to sign a contract to erect the factory near Shanghai, which will have an initial capacity of 150,000 vehicles per year starting in 2006.
The carmaker also announced that its Shanghai Volkswagen joint venture would increase its capital by 1.5 billion to 7.8 billion, in connection with the launch of its Touran compact minivan in China this year.
Due to its high-double digit growth rates, the Chinese passenger car market became Volkswagen's most important single market outside of Germany in 2002. The group has a market share of more than 30 percent in China.
Based on current exchange rates, VW plans to invest roughly 5.3 billion euros ($6.27 billion) in China over the next five years. The group is also considering the construction of a new engine factory there. Bureau Report
Volkswagen, which increased deliveries in 2003 by 36 per cent to some 698,000 cars in China, also builds cars for the local market with its other joint venture partner, First Automobile Works.
"This year we're aiming to produce and sell more than 800,000 vehicles in China," Pischetsrieder said. "We will double this volume by 2008."
The agreement was signed during an official visit by Chinese Prime Minister Wen Jiabao to VW's luxury unit Audi in Ingolstadt.
Following a review of its operating efficiency and utilization, the group also plans to sign a contract to erect the factory near Shanghai, which will have an initial capacity of 150,000 vehicles per year starting in 2006.
The carmaker also announced that its Shanghai Volkswagen joint venture would increase its capital by 1.5 billion to 7.8 billion, in connection with the launch of its Touran compact minivan in China this year.
Due to its high-double digit growth rates, the Chinese passenger car market became Volkswagen's most important single market outside of Germany in 2002. The group has a market share of more than 30 percent in China.
Based on current exchange rates, VW plans to invest roughly 5.3 billion euros ($6.27 billion) in China over the next five years. The group is also considering the construction of a new engine factory there. Bureau Report