VW China may drop diesel car project

Shanghai, July 30 (Gasgoo.com) Volkswagen (VW) China may drop its ambitious diesel car project due to weakening diesel supply in the local market.

Diesel cars are not faring well in China, especially in such a period with diesel in short supply. Volkswagen will study how long the diesel shortage will last in order to evaluate its plan for diesel engine’s local production, said VW China vice president Zhang Suixin in a statement on July 21.

VW had planned to put 1,000 diesel taxis in the Chinese market starting from Shanghai and then to expand to other cities.

In early April, at a forum on diesel cars development, Zhang Suixin said Volkswagen aims to build a diesel engine production line in two years. “We will deliver 300 diesel cars to the market this year and 700 more as of 2009, “he noted. “The first small batch is for a test on technology and the latter will focus on economic profit.”

However, the project is laid aside because of short diesel supply since the beginning of this year. There isn't a production project for 1,000 diesel taxis in Shanghai VW, said Shanghai VW's public relations department on July 29.