Volkswagen has reportedly kicked off its expansion plan in south China, and the details will likely be publicized on the Beijing International Automotive Exhibition from April 25 to May 2, 2010 at the earliest.
According to the preliminary development strategy, the German auto titan will separately team up with China FAW Group and Shanghai Automotive Industry Corporation (Group) (SAIC) to build two plants in the southern Chinese province of Guangdong, which has been dominated by the Japanese carmakers for a long time.
The annual production capacity of the two factories will top 200,000 units, respectively, after they are likely to start running in 2013, said people with the direct knowledge of the matter.
Volkswagen has established a batch production bases in Shanghai, Changchun, Chengdu, and Nanjing, but no any plant for south China that accounting for 30% of the country's total auto sales. Currently, more than 70% of Guangdong's automobile market is controlled by the Japanese automakers, especially Toyota.
Although Volkswagen's expansion plan in south China is not dead against Toyota, the latter that is anxious about the massive recall event will face more competition pressure, said an analyst from Industrial Securities Co., Ltd. Volkswagen aims to replace Toyota as the world's biggest carmaker, citing its development strategy for 2018.
This time, Volkswagen is said to create the new plants through its two China joint ventures, Shanghai Volkswagen Automotive Co., Ltd. (SVW) and FAW-Volkswagen Automotive Co., Ltd. (FAW-VW), respectively. The SVW production base in Guangzhou will be responsible for both the Volkswagen and Skoda brands, while the other's main products are under the Volkswagen and Audi brands.
Related details are still under discussion. However, an insider revealed that the world-known carmaker had selected Shunde District, Foshan City, south Guangdong, as the location. The local government promises to offer more preferential policies in the near future.
The Volkswagen China Head Winfried Vahland declined to reveal more details, but he confirmed sources that the Seat brand would not be introduced into the to-be-built plants temporarily.
In 2009, China became the biggest single market of Volkswagen for the first time, with a total sales volume of 160,000 cars, in place of the German automobile titan's home battlefield.
About 6.29 million units of the Volkswagen were sold across the world last year, with a 1.1% climb year on year, while total sales volume in China hiked 36.7% to 1.4 million. Meanwhile, the group aggregately sold 1.24 million cars in Germany, rising 17.5%.
The global sales volume of Volkswagen's luxury brand, Audi, declined 5.4% from a year earlier to 949,700, however, up to 158,941 units were sold in China, with a 32.9% jump.
