Shanghai, November 16 (Gasgoo.com) Volkswagen AG plans to boots its market share in southern China by setting up a plant and launching more new vehicle models there. The south plant of VW China may make and sell cars of its Seat brand in the Japanese vehicles-dominated market, Guangzhou Daily reported today.
Next week at the 2009 Guangzhou auto show, Volkswagen China is expected to announce its "South Strategy" as a key part of its "2018 Strategy." The highlight of the announcement will be the plan to build a plant in southern China, where VW cars of new brands will be produced to grab a larger portion of the southern market dominated by Toyota and Honda, which have Chinese ventures there.
Currently, German auto giant Volkswagen has two joint ventures in China, with FAW VW located in northeastern city of Changchun and Shanghai VW in eastern city of Shanghai. FAW VW also has a plant in southwestern city of Chengdu. Southern China, now contributing less than 9% of VW's China sales, has been a potential market for VW to explore.
Car buyers in southern China prefer youthful, dynamic brands. Shanghai VW makes cars of the Skoda brand and FAW produces the lowest A-level Jetta cars. As the A0-class models have been seeing rapid growth in the China's auto market, analysts said that VW will introduce its Seat brand to the new plant in southern China.
"The question is not whether the Seat brand will come to China, but when it will come," said Fan Ande, CEO of Volkswagen Group China. Seat chairman Erich Schmitt has also said that his company is planning to enter the fast-growing Chinese market and will choose coastal cities as its pilot market.
Analysts said that Volkswagen's plant in South China may be located in Dongguan city or Nanhai city, Guangdong province, although exact information on this project will not be disclosed until next week.
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