Paul Tan's Automotive News - According to a report, Volkswagen is mulling over the addition of a domestic brand in China to work the rapidly-growing entry-level segment.
Currently, the brand is not competing in the 20% of the market occupied by low-cost products, but VW Group China, together with its partner First Auto Works, is currently evaluating whether it needs to add a domestic brand to do so.
If it does open a new entry-level brand into the market, VW will join the growing list of manufacturers introducing joint-venture entry-level brands – General Motors, Honda and Nissan already have such representation in the segment. It all falls in line with the Chinese government's call for international automakers to create such brands so their Chinese partners can gain expertise and technology, the report adds.
Even if doesn't introduce that entry-level brand, VW is already set to double its production capacity to around four million units a year by 2018, up from the projected sales of two million units this year.
The company will be opening two new assembly plants – with an annual capacity of 300,000 each – in the country, and production at its seven existing plants will of course be increased. It will however take about two to three years before the new plants can begin production.
