Earlier on 29 August, the Shanghai Volkswagen joint venture (SVW) started SKD vehicle assembly in Urumqi. This is the Volkswagen Group’s 102nd plant.
The first vehicle plant for the Group in China’s Xinjiang region will assemble the Santana sedan. With the planned start of the plant’s own paint shop and body shop, the factory will produce up to 50,000 vehicles per year from 2014.
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Volkswagen believes the new investment in the country’s west to be vital for continuing its brand’s strength in China over the long term.
The plant is in what some observers believe to be a curious location, near the border with Kazakhstan, and close to an area infamous for ethnic clashes. Indeed, the Volkswagen media release devotes multiple paragraphs to the company’s intention to promote “sustainable economic and social development”, and includes “support for all ethnic groups” in the region.
SVW currently operates vehicle plants in Shanghai, Nanjing and Yizheng. A further plant in Changsha in the southern part of central China is to be completed by the end of 2015.
In 2012, the Volkswagen Group delivered more than 2.81 million vehicles to customers in China and the country is easily its largest market. In the first seven months of this year, deliveries rose by 18.5 percent compared with the comparable prior-year period (1.79 million vehicles).
The Volkswagen Group and its partners, SAIC and FAW, are constructing five further plants in China this year and over the next few years. By 2018, the number of employees will have increased from 75,000 to 100,000, and annual production capacity will have risen from 2.6 million to over four million.
Author: Glenn Brooks
