Most likely filled with a certain degree of foreboding, Volkswagen signed today contracts with their joint venture partner FAW to build a new plant in the south of China, we hear from a Volkswagen press release. That VW has designs on building cars in the South of China is no news to the avid TTAC reader. But why the anxiety?
The new Volkswagen plant will be built in Foshan, in the Southern Chinese region of Guangdong. Foshan? Yep, the same town where Honda has all those labor troubles. Foshan is ground zero for alleged plans by the Chinese government “to double average wages over the five years from 2011,” as The Nikkei [sub] heard.
Right into that hornet’s nest will VW place “a complete production facility with press shop, body shop, paint shop and assembly unit is to be constructed on a site with an area of 170 hectares. The maximum annual production capacity will be 300,000 units. Construction work is to start at the end of 2010 and the new plant will have a workforce of about 4,000 employees by 2013. The investment of about 520 million euros is to be funded from the cash flow of FAW-Volkswagen.”
Viel Glück, we say.