VW to boost China joint ventures' R&D

SHANGHAI (Reuters) -- Top European auto maker Volkswagen AG said today it will boost the research and development capability of its China ventures but has no plan to roll out cars under the ventures' own brands next year.

Volkswagen, which has tied up with FAW Group and SAIC Motor Corp since the early 1990s, has invested roughly $400 million to build up the ventures' R&D facilities, the German auto maker's China spokesman said.

More investment will be made to shore up the R&D abilities of the ventures, which already play a major role in developing new models catering to the Chinese market, the spokesman said, without elaborating.

However, he added that a new car to be rolled out in 2008 by Shanghai Volkswagen, its tie-up with SAIC, would not carry the venture's own brand as stated by a local newspaper.

"The model is mainly designed in China by Shanghai Volkswagen, but it will still carry the Volkswagen brand," he said.

The Shanghai Securities News reported on Friday that the venture would produce a car under its own brand next year, becoming the second foreign auto venture to unveil a strategy for its own brand, following Guangzhou Honda, Honda Motor's venture in south China.

Foreign auto ventures, such as Shanghai GM, General Motors Corp's flagship car venture in China, have traditionally produced cars with foreign badges.

The paper also said Shanghai Volkswagen's new model might replace its Santana 3000, but the Volkswagen spokesman said it would have no effect on the Santana.

Volkswagen is a major player in the world's second-largest auto market. It raised its 2007 China sales target by 12.5 percent last week to 900,000 vehicles after reporting 30.2 percent sales growth in the first nine months in China and Hong Kong.