Shanghai, March 17 (Gasgoo.com) Together with its Chinese partner SAIC Motor and FAW Group, German auto giant Volkswagen AG plans to set up two plants in Guangdong province to boost sales and raise market share in south China, media reported Monday.
More than 4 billion euros ($5.5 billion) will be invested in the southern production base including two plants, due to be completed in 2013, which will make models under Volkswagen, Audi and Skoda brands, with output capacity of 200,000 units each, according to Winfried Vahland, president of Volkswagen China Group.
Volkswagen will create the new plants through its two China joint ventures, Shanghai Volkswagen (SVW) and FAW-Volkswagen (FAW-VW). In VW's Guangzhou production base, the SVW facility will focus on both the Volkswagen and Skoda brands, while FAW-VW's plant will produce vehicles under the Volkswagen and Audi brands.
Since VW entered the Chinese market in 1984, it has performed sluggishly in south China, a booming market sector that has been dominated by Japanese rivals, including Toyota, Nissan and Honda who have local production bases.
VW plans to boost sales in China's southern provinces from 150,000 units now to 500,000 units within five years and to drive market share there to 18% from the 12% in 2008, as part of its overall strategy in China to double sales to 2 million units by 2018.