Nanjing unit of Shanghai VW kicks off to make 60,000 cars in 2008

Shanghai, April 18 (Gasgoo.com) The Nanjing company of Shanghai VW went into operation today and is expected to manufacture 60,000 vehicles in 2008. This marks a new stage in the acquisition and restructuring of Nanjing Auto's Fiat facility by Shanghai VW, and the capacity bottleneck of the SAIC's subsidiary will be eased by the operation of its Nanjing facility.

After SAIC's buying of the 100% stake of Nanjing Auto was registered with the industry authorities earlier this month, Shanghai VW, a 50-50 joint venture between SAIC Motor Corp and Volkswagen AG, agreed to acquire the facility of Nanjing Auto's former partner Fiat. The acquisition deal was signed recently after the Italian car-maker's joint venture assets in Nanjing were evaluated. Industry insiders estimated the assets at about 1.5 billion yuan ($214.6 million), but Shanghai VW declined to say how much it has paid to acquire the facility.

The Nanjing Fiat facility had suspended production until it resumed operating today. It is expected to produce as many as 60,000 cars in 2008, and its annual production capacity will rise to 150,000 units in the next few years, said SAIC's president. This will ease the production capacity of Shanghai VW to meet the growing auto-market demand.

SAIC plans to boost the combined capacity of its Nanjing-based companies, including the newly-bought Nanjing Auto, to 500,000 units a year by 2012, equal to the current annual capacity of Shanghai VW.