VW sees China trade tough in H1 2009

Volkswagen expects trading to be tough in China during the first six months of 2009 but is still planning for growth, its local head of operations said in comments to be published by a German newspaper.

"The first half, in particular the first quarter, will be difficult," Winfried Vahland said in an article to appear in Wednesday's Frankfurter Allgemeine Zeitung.

"We plan for further growth. Should this not be the case, however, we are also prepared for this."

A continued boom in Chinese car demand has nearly allowed it to overtake the group's home base of Germany as its single largest market.

Sales in China have risen 12.6 percent to 853,800 vehicles, almost catching up to the 881,500 sold in Germany, where growth amounted to just 1.8 percent in comparison.

The head of VW's India operations, meanwhile, reaffirmed to the German daily his longer-term goals.

"In 2012 we want to sell 140,000 vehicles for a market share of 8 percent, growing 10 percent on average annually by 2018," Joerg Mueller told the paper.

China and Brazil, VW's third-biggest market with some 550,700 units sold in the ten months through October, are of immense importance to Volkswagen.

By comparison, however, the group is still far behind in Russia with just 107,900 vehicles sold during the period, while India is all but a white spot on the map with only 16,700.

Volkswagen plans to increase the number of dealers in India from the present ten to approximately 50 by the end of 2009, it said early last month.

The group is investing 580 million euros ($732.2 million) in a new plant in Pune, located about 150 kilometres south east of Mumbai, which will form the cornerstone of the group's strategy in India.

Assembly begins in spring of next year, and eventually the plant will churn out 110,000 cars per year.