Volkswagen is to boost its workforce from 250,000 to 290,000 by 2018, with most of the new jobs to be created in China, according to a German media report.

Citing internal and confidential documents, Woche said that 35,000 of the 40,000 new posts will be in China.

Around 21,000 jobs will be created in the production sector, including 400 managers and 5,000 engineers.

The publication added that the new posts will come on top of those to be created to replace the 60,000 VW employees due to retire by 2018.

Last month, it was reported that VW was considering launching a new car brand specifically for the booming Chinese market. Handesblatt newspaper said: “The Chinese government has been promoting Chinese brands for some time now.

“In this context, joint ventures with foreign companies - such as FAW Volkswagen or SAIC Volkswagen for us - are encouraged to make a local marque."

VW is currently in talks with its Chinese partners, looking at the market for models below EUR8,000 (US$11,000), the report said, adding that the company's supervisory board was expected to approve the project.