FAW-VW to enter south China with Guangdong plant

Shanghai, May 10 (Gasgoo.com) Reporters confirmed with FAW-VW last week that the Group will formally start construction of the Guangdong plant, as an important part of its strategy to enter the south China market, aiming to expand its capacity and develop a new market in the region.

At present, FAW-VW has two large vehicle production bases, in Changchuan and Chengdu, whose combined sales rose over 33% to 682,000 units in 2009. The rapid growth, however, gradually sees pressure coming from inadequacy of capacity, with the Golf, new Bora and Sagotan models facing an all time competition for supply at an already tight market.

Under Volkswagen's 'strategy 2018', the Group shall achieve or exceed a production and marketing scale of 1 million units in 2018, while it obviously cannot attain this goal with only one production base expanded in Chengdu.

FAW-VW said the Group's shareholders of both sides have reached a consensus in construction of the Guangdong plant, but did not disclose the specific plant location, which may be Shunde, Nanhai or Dongguan, all located in southern Guangdong province.

Additionally, compared to the Japanese brands, the VW brand is always at a competitive disadvantage in the south China market, where the passenger car has the biggest sales share. Its market share in the south China region is also always lower than in other regional markets. The building of Guangdong plant will apparently help VW break into the south market and create a huge impact there.

Earlier, Volkswagen China President and CEO, Winfried Vahland said in an interview, taken in Germany that operation time of the south plant will be in the medium phase of Volkswagen's 'strategy 2018', which is around the year 2013.