VW says won't delay Chengdu plant expansion

Shanghai, February 5 (Gasgoo.com) Volkswagen has denied a media report of the plans to delay the expansion of its car manufacturing plant in southwest China and reinforced its commitment to invest $3.12 billion in the country by the end of 2010, Reuters said today, citing a VW China official.

Earlier this week, the Oriental Morning Post (Dongfang Zaobao) in Shanghai first reported that FAW VW, Volkswagen AG's Chinese venture with FAW Group, planned to postpone expanding a plant in the southwestern Chinese city of Chengdu until 2011 as a slowing economy curbs automobile demand in the country.

Volkswagen's China spokesman told Reuters that the German automaker had no plans to delay the expansion of its Chengdu plant, which now builds 20,000 vehicles annually. The new assembly line was previously scheduled to start operating in 2010, making 200,000 Jetta and Sagitar sedans each year.

VW FAW set up the Chengdu car plant in July 2007 with an initial capacity of 150,000 units. The company intends to expand the plant's eventual capacity to 350,000 units.

The VW China official said Volkswagen's commitment to invest $3.12 billion in the country over three years from 2008 remained unchanged, Reuters reported.

Sales of VW cars in mainland China, Hong Kong and Macau increased 12.5% to 1.02 million units in 2008, down from 28% growth of the previous year.