Volkswagen Dumps More Money Into China

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.