Shanghai, October 22 (Gasgoo.com) German carmaker Volkswagen AG said last week that it will invest a total of 4 billion euros ($5.98 billion) in new products and production capacity expansion in China from 2009 to 2011 for further growth in this fast-growing market, MarketWatch reported.
Last Thursday, Shanghai Volkswagen, a joint venture set up in 1984, produced its five-millionth vehicle and Dr. Horst Neumann, a top executive of Volkswagen for human resources, announced that the German automaker would continue its growth in China with a €4 billion investment in new products and production capacity between 2009 and 2011.
These investments will be financed from the cash flow of Volkswagen's joint ventures in China, the fast-growing Asian country that is set to overtake the United States as the world's largest auto market. The German auto giant's other joint venture in China is FAW-Volkswagen in northeastern city of Changchun.
Volkswagen will reduce the per-km fuel consumption and exhaust emissions of its China-made cars by 20% before 2010, respectively, and is planning to apply more cutting-edge technologies to its Chinese factories, a vice president of Volkswagen Group China said earlier this week.
China has become Volkswagen's fastest growing market, with its sales in the Chinese mainland and Hong Kong up 37% to 1.06 million units in the first nine months this year, with sales in September totaling nearly 150,000 units, a monthly record.
Consumers in China will likely buy 13 million vehicles this year and 20 million annually by 2015. Volkswagen expects to reach its goal of selling 2 million cars a year in China by 2018 "earlier than planned."