By on April 26, 2010

Volkswagen, China’s largest car brand, is undeterred by rumors that the Chinese might lose interest in foreign joint ventures. As someone who has been there since 1984, Volkswagen probably knows better. Volkswagen just said: “I see your 1.3 billion people and raise you by 1.6 billion.” Euros, to be invested into plants in China.

According to a company statement, “Volkswagen has added 1.6 billion euros to its current investment program for China.”

Last year, Volkswagen already decided to invest €4.4b into China. With the new total of €6b,VeeDub wants to out-build and out-sell the competition. The additional funds will be used for facilities at two new locations.

As reported a few days ago, Volkswagen will build two plants in Southern China, where Volkswagen’s presence is thin at the moment. To keep matter balanced with their joint venture partners, one plant will be built with FAW, the other with SAIC. Both plants will add an annual output capacity of at least 200,000 units. They’ll need more capacity soon, their longer term target is to build and sell 2m units in China. Just to put it in perspective: All of Germany buy around 3m cars a year – in a normal year.

In the first quarter of 2010, the Volkswagen Group delivered a total of 457,259 vehicles to Chinese customers, slightly under-performing the market with 60.9 percent growth. This was caused by capacity constraints which only will get more stringent until the new plants come on-line. China is Volkswagen’s new home market: They will easily sell more cars in China this year than in Germany.

This year, the Volkswagen Group will launch seven new or updated models produced locally on the Chinese market.

For those who want to keep track: The Volkswagen Group currently produces the following models in China: Volkswagen Polo (notchback and hatchback), Cross Polo, Lavida, Santana, Santana Vista, Passat New Lingyu, Touran, Tiguan LWB (long wheelbase), Golf, Golf GTI, New Bora, Jetta, Sagitar and Magotan as well as the Škoda Fabia, Octavia and Superb, and the Audi A4 L (long wheelbase), Audi A6 L (long wheelbase) and Audi Q5.

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3 Comments on “Volkswagen Dumps More Money Into China...”

  • avatar

    I think we have to assume that indeed Volkswagen does know better. They were there first and they certainly have succeeded. I assume it was to be expected they would lose a little share, with all the new entrants, but they haven’t done too many things wrong in China.

    Too bad the Phaeton’s new face makes it look like an Avalon, however.

  • avatar

    This is one wicked poker game. VW isn’t going to get bluffed out of the game. The government is posturing and does hold one hell of pile of chips but doesn’t hold ALL the cards.
    It’s a big table and some of the players might not have the constitutions to stay in. As long as the game can be kept straight VW has a good chance to get a nice piece of the pot.

  • avatar

    if you want to grow the bottom line you gotta go where the demand is.

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